Couche-Tard Drops $46 Billion Bid To Buy 7-Eleven Owner Seven & I
Alimentation Couche-Tard, the Canadian operator of Circle K convenience stores, has dropped its $46 billion bid to acquire Seven & i Holdings, citing the Japanese owner of the 7-Eleven chain's 'lack of constructive engagement' throughout a yearlong negotiation.
In a 1,500-word letter to Seven & i's board on Wednesday, Couche-Tard said the Japanese retailer was uncooperative in meetings and did not provide enough information to move the deal forward.
'There has been no sincere or constructive engagement from 7&i that would facilitate the advancement of any proposal, contrary to comments made publicly by 7&i representatives,' Couche-Tard said in the letter.
'The quantity and substance of the permitted due diligence, including at two tightly constrained management meetings, have been negligible,' it added. 'Rather, you have engaged in a calculated campaign of obfuscation and delay, to the great detriment of 7&i and its shareholders.'
In response, Seven & i said on Thursday that while it's disappointed by Couche-Tard's decision and disagreed with the Canadian rival's 'numerous mischaracterizations,' it wasn't surprised. Seven & i added that it had 'consistently engaged in good faith and constructively' with Couche-Tard to explore the possibility of reaching a deal that would benefit its shareholders.
Shares of Seven & i fell more than 9% on Thursday to ¥2,007.5, which is 23% below Couche-Tard's offering price of ¥2,600.
Couche-Tard's withdrawal brings to an end of what could have been the biggest-ever foreign takeover of a Japanese company to create one of the world's largest retail groups by store count. It could dampen foreign investors' optimism about Japan's shift away from protectionist practices, despite the country's ongoing corporate governance reforms aimed at improving shareholder returns.
Last August, Couche-Tard offered to acquire Seven & i for $39 billion, and raised the bid to $46 billion in less than two months after the Japanese retail giant rejected the proposal. Then in November 2024, Junro Ito, part of Seven & i's billionaire founding family, proposed a $58 billion management buyout, only to pull back in February after failing to secure financing.
Since then, Couche-Tard and Seven & i had been in discussion to divest stores in the U.S. to address antitrust concerns. At the same time, the Japanese retail giant announced a sweeping business restructuring plan to fend off the takeover bid. The overhaul includes the divestment of its underperforming supermarket unit, a potential listing of its U.S. business and a ¥2 trillion share buyback through fiscal year 2030.
In the letter to Seven & i on Wednesday, Couche-Tard said the Japanese retailer didn't provide sufficient information about commercial due diligence needed for the deal. It also said its meetings with Seven & i were a 'readout' and 'tightly scripted.' In one meeting, a 7-Eleven executive attempted to address one of Couche-Tard's questions, but was interrupted and rebuked by Seven & i chief executive Stephen Dacus, who 'pointed to his head as if to remind his colleague to 'think',' said Couche-Tard in the letter.
The two companies also couldn't reach an agreement on the deal structure. Couche-Tard said it had at one point proposed to acquire all of Seven & i's business outside of Japan and 40% of the business in Japan, leaving 60% of the latter to Seven & i. In turn, Seven & i proposed selling its U.S. business to Couche-Tard in exchange for equity ownership. Couche-Tard, however, said such a deal 'would not deliver the significant premium that was offered to your shareholders in our transaction proposals and, in our view, would undermine the operational prospects of the combined business.'
Seven & i said in its letter that it had 'pursued all parallel paths to ensure that value for shareholders and other stakeholders is maximized' throughout the negotiation. MORE FROM FORBES Forbes Seven & i To Sell Supermarket Unit To Bain For $5.4 Billion And IPO U.S. Arm By Zinnia Lee Forbes Japan's Billionaire Ito Family's 7-Eleven Chain Rejects $39 Billion Bid From Circle K Owner By Zinnia Lee Forbes Japan's Billionaire Ito Family's 7-Eleven Chain Gets Buyout Offer From Canadian Owner Of Circle K By Zinnia Lee
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