Canada's Couche-Tard abandons $46 billion bid to buy 7-Eleven owner

Business Standard

17-07-2025

In a statement, Seven & i said was it was disappointed by Couche-Tard's decision to walk away, but said it disagreed with the numerous mischaracterisations in Canadian suitor's letter
Bloomberg
Canada's Alimentation Couche-Tard Inc. has abandoned its ¥6.77 trillion ($45.8 billion) bid to buy Seven & i Holdings Co., saying the Japanese operator of 7-Eleven convenience stores had refused meaningful engagement during the almost yearlong pursuit.
'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 a letter to Seven & i's board, released late Wednesday.
Seven & i's stock plunged as much as 9.6 per cent in early trading in Tokyo on Thursday. The Japanese retailer has sought to make a case for remaining independent and has made sweeping changes, appointing Stephen Dacus as chief executive officer, making a deal to sell its superstore business for $5.4 billion, and proposing a ¥2 trillion share buyback and a listing of its US business.
In a statement, Seven & i said was it was disappointed by Couche-Tard's decision to walk away, but said it disagreed with the 'numerous mischaracterisations' in Canadian suitor's letter. The Japanese company also said it remains 'fully committed to our standalone value creation plan' and will move quickly to improve key areas of its operations.
'The moat of Japanese protectionism proved too much for Couche-Tard to cross,' Andrew Jackson, head of Japan equity strategy at Ortus Advisors, wrote in a note. 'It was always highly unlikely that this was going to be successful given Seven & i's positioning as one of Japan's most successful global companies and the fast closing of the ranks.'
The abandonment of the bid, which would have been the biggest-ever foreign takeover of a Japanese company, deals a setback to hopes of greater corporate openness in a country where executives have long been able to display more indifference to shareholder demands for higher valuation than in other places.
Before the proposal to buy Seven & i became public, an attempt to acquire such a well-known Japanese business at such scale was seen as audacious and unlikely, given the protectionist tendencies of the government and corporate boards prioritizing stability over shareholder value. That view may remain in place for a while, despite changes to corporate guidelines aimed at injecting more vigor into corporate Japan through improved governance and protections for investors.
Couche-Tard, which operates Circle K stores globally, disclosed that it has proposed alternate arrangements for a deal, including buying the Seven & i's international business and taking a minority stake in the Japanese business.
Bouchard, who co-founded Couche-Tard, said in March that there was a possibility of 'enhancing' the buyout proposal with better access to financial information. Since then, the two parties signed a non-disclosure agreement to share information, but Couche-Tard said in the letter that the level of engagement wasn't enough.
Most of the information shared by Seven & i was minimal or already publicly available, and meetings with management were superficial, or tightly scripted, Couche-Tard said. 'None of our critical questions were answered,' the company said.
In one meeting in Dallas, Couche-Tard said a Seven & i executive who attempted to 'thoughtfully address' a question related to international licensees was interrupted and rebuked by Dacus, who pointed to his head as if to remind his colleague to 'think.'
Seven & i has cited concerns over potential pushback from US antitrust regulators over any deal to combine with Couche-Tard. In order to address this risk, the two sides agreed earlier this year to seek potential buyers for about 2,000 North American convenience stores.
Although several parties expressed interest in acquiring the stores, Seven & i didn't share required information with potential buyers, Couche-Tard said.
There will now be greater pressure on Seven & i's management to deliver after Couche-Tard's withdrawal, according to Bloomberg Intelligence analyst Lea El-Hage.
'Its August strategy update will be key to demonstrating its standalone plan can generate more value than the rejected acquisition,' El-Hage wrote in a note, referring to a management update planned by Seven & i next month.