On October 18, 2022, a 7-Eleven convenience store sign was visible near the store in Chicago, USA.
Jakub Bolzycki | Noor Photos | Getty Images
Japanese seven and me7-Eleven convenience store owner says it has received preliminary takeover offer from Canadian company Nutritional Couche-Tardthis may be the largest acquisition of a Japanese company by an overseas company.
News of the takeover bid sent the Tokyo-listed company's shares soaring nearly 23%, valuing it at about 5.6 trillion yen ($38 billion). Couche-Tard operates Circle-K convenience stores and is valued at approximately $58 billion.
Seven & i said in a statement on Monday that a special committee had been formed to review the proposal, adding that no decision had been made by the committee or its board of directors. The announcement came after Nikkei reported on the deal.
Alimentation Couche-Tard did not immediately respond to a request for comment outside regular business hours.
A person familiar with the matter, who spoke on condition of anonymity, said the talks were “at a very early stage.”
A deal to acquire the entire company would be the largest ever by an overseas company, according to London Stock Exchange Group (LSEG) data, following the 2018 acquisition of Toshiba's memory chip business by a consortium led by private equity firm Bain. The largest acquisition by a Japanese company.
For investors, it also marks the latest milestone in the growing appeal of once-shunned Japanese assets.
Duncan Clark, chairman and founder of investment advisory firm BDA, said changes in corporate governance helped highlight the renewed relevance of Japan and Japanese companies.
“We see this in the number of financial institutions opening branches or hiring staff in Japan,” Clark said.
Japan had one of the world's best-performing stock markets last year, and this year the Nikkei hit a series of record highs as investors applauded governance reforms.
“This is another example of the attractiveness of the Japanese market to overseas buyers,” said Manoj Jain, co-founder and co-chief investment officer of Maso Capital in Hong Kong.
“Coupled with private equity interest, we expect this trend to continue to be driven by underlying asset values, efficiency improvement capabilities and financing costs,” Jain said.
Seven & i is facing pressure from activist investors who are urging it to sell underperforming assets and double down on its global convenience store business centered on the flagship 7-Eleven brand.
Founded in 1980, Couche-Tard has grown from a single store in Quebec into a global network of convenience stores and gas stations, primarily through acquisitions.
If the deal goes through, Couche-Tard will spend $3.3 billion to acquire some of the companies. total energyLast year's acquisition of European gas stations and a $20 billion acquisition of Carrefour, Europe's largest food retailer, were rejected by the French government in 2021 due to food safety concerns.
In 2020, Seven & i and Couche Tard emerged as rivals to acquire U.S. gas station chain Speedway, which the Japanese company ultimately acquired for $21 billion.