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CNA
18-07-2025
- Business
- CNA
Japan provides reality check for Couche-Tard's grand retail dream
TOKYO :Alimentation Couche-Tard's attempt to create a global convenience store behemoth was set back when it pulled its $46 billion bid for Seven & i, whose consumers in Japan have emotional ties to their purveyor of rice balls. The Canadian company, which owns Circle-K, withdrew its bid on Thursday after a year-long pursuit, citing "a calculated campaign of obfuscation and delay" by the Seven-Eleven operator and lack of engagement by its founding Ito family. Couche-Tard first disclosed the proposal in August last year, with Seven & i under pressure from shareholders to boost returns by selling off assets and focusing on its mainstay convenience store business. "ACT bid at just the right time... when Seven was at its weakest," said Michael Causton of consultancy JapanConsuming. The possibility of a takeover quickly sparked concern about whether the Seven-Eleven operator's fresh food would be affected. It also generated debate about Japan's openness to foreign takeovers. Convenience stores are an important resource in Japan during natural disasters, but Seven-Eleven's massive global presence made it a target for Couche-Tard. With Seven & i looking to avoid a takeover, it changed its self-reported national security category to "core" in September, a step which raised questions as to whether it was a defensive manoeuvre. In private, it emphasised its importance to Japan's economic security to the government, three sources familiar with the matter said. Seven & i declined to comment. The Canadian company hiked its proposal price in October, with Seven & i revealing plans to hive off assets the same month. The Japanese firm also announced plans to list its North America business. "It has sparked the management into being more proactive," said Lorraine Tan, an analyst at Morningstar. The company had expressed concerns about the regulatory hurdles to a deal. "Couche-Tard seemed to want to iron out the details after Seven & i had agreed to the deal," said Travis Lundy, an analyst who publishes on Smartkarma. PROLONGED NEGOTIATIONS Couche-Tard's approach appeared to gain a tailwind when an attempt by the Ito founding family to buy Seven & i collapsed in February after failing to secure funding. Then, after initially providing little public explanation for pursuing the deal, Couche-Tard in March made a publicity push for the combination emphasising its financial credentials. However, the Canadian retailer faced growing challenges including lacklustre retail spending in the U.S., with its stock price sliding between the end of last year and Wednesday's close. "Couche-Tard may have realised that the cost cannot justify the risks, including prolonged negotiations and uncertain business prospects," said Tatsunori Kawai, chief strategist at Mitsubishi UFJ eSmart Securities. Its shares jumped 8 per cent on Thursday after withdrawing the bid. "To continue further... would ultimately be a lost opportunity for its own growth," said Takahiro Kazahaya, an analyst at UBS. Analysts are also questioning how Seven & i, famed for its ready meals, will drive further growth. On Thursday, Natsuko Douglas, an analyst at Macquarie Capital, downgraded Seven & i to neutral from outperform, citing unclear benefits from the planned listing of the North America business. "Full recovery is a long time away," she wrote in a note. The planned listing is "something they probably don't want to do but were prepared to do to get rid of Couche-Tard," said Tom Leske, director at Churchill Capital. Industry experts point to Seven & i's strengths, honed over decades in Japan's bruising retail market, which has proved tough for many foreign entrants.
Bloomberg
17-07-2025
- Business
- Bloomberg
Couche-Tard's Failed Bid for Seven & i Sparks Debate Over Japan
By and Alice French Save Alimentation Couche-Tard Inc. 's decision to walk away in frustration from an attempted acquisition of Seven & i Holdings Co. set off a debate in Tokyo as to what lessons foreign companies with ambitions for M&A should draw. The bid was audacious from the start. 7-Eleven convenience stores have one of Japan's most recognizable brands and a takeover would have been the largest by a foreign entity in the country's history. Moreover, the founding Ito family were so opposed to the deal that they turned to one of their archrivals to try and block it.
CNA
16-07-2025
- Business
- CNA
Couche-Tard pulls $47 billion takeover bid for Seven & i
Canadian retailer Alimentation Couche-Tard said on Wednesday it was withdrawing its $47 billion takeover bid for Seven & i Holdings, citing a lack of "constructive" engagement with the Japanese company's founding Ito family. The move ends a year-long attempt by Couche-Tard to create a global convenience store giant with about 20,000 locations by merging Circle K and 7-Eleven brands. It had also agreed to a store sale plan, in a bid to ease some regulatory hurdles. "We have repeatedly sought a friendly dialogue with the Ito family but they have not been open to any conversation," Couche-Tard said in a letter to its board of directors. Couche-Tard had raised its offer to $47 billion from $38.5 billion in October last year and in March offered to increase it further if the Japanese firm cooperated and revealed more financial information. Its attempts at cementing the acquisition had gathered steam after a rival $58 billion white-knight bid from Seven & i Holdings' founding family ended after failing to get financing. The companies had inked a non-disclosure agreement (NDA) earlier this year, but "the quantity and substance of the permitted due diligence, including at two tightly constrained management meetings, have been negligible," Couche-Tard said in the letter.
