The Japanese company that owns 7-Eleven has turned down a $38 billion (£29.2 billion) takeover bid from Canadian competitor Alimentation Couche-Tard. In a letter to the potential buyer, Seven & i Holdings said the offer from the owner of Circle K “significantly” undervalued the company and carried substantial regulatory risks.
However, the 7-Eleven owner noted that it remains open to further discussions and would consider a more favorable offer. If the deal were successful, it would create a global convenience store giant with 100,000 locations.
Stephen Dacus, chair of Seven & i’s board reviewing the deal, described the bid as “opportunistically timed” and said it “significantly undervalues” the Japanese retailer and its growth potential for shareholders.
Alimentation Couche-Tard (ACT), based in Quebec, operates about 17,000 stores in North America, Europe, and Asia under the Circle K and Couche-Tard brands. The initial offer valued Seven & i at $14.86 per share, which was over 20% higher than its share price before the bid was announced. The offer was made at a time when the Japanese yen is particularly weak against the US dollar, making the company more appealing to foreign buyers.
Seven & i also highlighted “numerous and significant challenges” the deal could face from US competition regulators as part of their rejection. 7-Eleven is the world’s largest convenience store chain, with 85,000 outlets across 20 countries and regions. If the deal went through, ACT’s presence in the US and Canada would more than double, reaching around 20,000 locations.
No Japanese company of this size has ever been acquired by a foreign firm before. Historically, Japanese businesses were more likely to acquire companies overseas. Neil Newman, head of strategy at Astris Advisory Japan, commented that “Japan needs to protect its national assets, and Seven & i is a significant asset, so this will likely lead to prolonged negotiations.”
“If successful, it would signal that Japan is open for business and welcomes foreign investment,” Newman added. Last year, the Japanese government issued new guidelines on mergers and acquisitions, encouraging companies to carefully consider credible takeover offers rather than dismissing them outright.
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