Deal For 7-Eleven Moves Closer As Books Opened To Circle K Owner

Forbes

05-05-2025

The owner of 7-Eleven and Couche-Tard have entered into an NDA.
A mega-merger of two convenience store giants looks to have taken a step closer after the Tokyo-based owner of 7-Eleven entered a non-disclosure agreement (NDA) with Alimentation Couche-Tard (ACT), which operates close to 17,000 Couche-Tard and Circle K stores across North America and Europe.
The move comes as the companies continue negotiations which could see Canadian-based Couche-Tard to acquire all the outstanding shares of Seven & i.
The Canadian retailer is ramping up its efforts to acquire the Japanese operator of 7-Eleven convenience stores for nearly $50 billion in a deal that will combine the c-store powerhouse with ACT's Circle K brand.
According to an official announcement from the companies, the NDA is meant to progress transaction discussions, facilitate due diligence, and collaborate on plans to engage with regulators. However, there is no assurance that these discussions will result in a transaction.
"We appreciate the Special Committee of Seven & i engaging in substantive discussions regarding our proposal and providing access to diligence. We look forward to working collaboratively with Seven & i in the interests of all stakeholders," Alex Miller, Couche-Tard President and CEO said in a release.
The agreement, considered a prerequisite for friendly talks, includes provisions that ACT does not conduct a hostile takeover, while the Tokyo-based company insisted that it will continue to explore its own growth plans.
"The execution of the NDA is a positive step in the constructive engagement process with Couche-Tard,' said Paul Yonamine, chair of the Japanese company's special committee looking into the takeover proposal. "We remain committed to pursuing two parallel paths to ensure that value for shareholders and other stakeholders is maximized.'
The takeover proposal from Couche-Tard first came to light in August last year but to date Seven & i had rebuffed all approaches, citing uncertainties over clearing U.S. antitrust hurdles because of the potentially dominant position of the combined businesses in North America.
In response, Couche-Tard had agreed to seek a buyer for some of its stores in advance of any potential deal, a fairly standard move for major consolidations of rival retail businesses aa they avoid anti-competition regulations.
In its most recent earnings update posted in March, Couche Tard announced net earnings attributable to shareholders of the corporation were $641.4 million for the third quarter of fiscal 2025 compared with $623.4 million for the third quarter of fiscal 2024.
Circle K owner ACT has posted strong revenues. (Photo by Jakub Porzycki/NurPhoto via Getty Images)
Adjusted net earnings attributable to shareholders were approximately $641.0 million compared with $625.0 million for the corresponding quarter of last year, representing an increase of 2.6%.
'Same-store sales were positive in both Canada and Europe compared to the same quarter last year, and we had sequential improvement in the United States, impacted by historic winter storms in our southern business units,' Miller said.
'Food continued to grow in the United States as our meal deal promotions performed well and have been extended to Canada. In our fuel business, we are maintaining market share in the United States and margins aligned with recent quarters. As inflationary pressure persists, our number one priority is winning our customers by being ready with the products and services they want at compelling value," he added of Circle K and Couche Tard's performance.