Latest news with #global expansion
CNA
4 days ago
- 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.
Reuters
4 days ago
- Business
- Reuters
Japan provides reality check for Couche-Tard's grand retail dream
TOKYO, July 18 (Reuters) - Alimentation Couche-Tard's ( opens new tab attempt to create a global convenience store behemoth was set back when it pulled its $46 billion bid for Seven & i (3382.T), opens new tab, 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. 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% 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. "Seven globally will be giving competitors a hard time once it has its ducks in a row," said JapanConsuming's Causton.
South China Morning Post
13-07-2025
- Business
- South China Morning Post
For Chinese firms going out, global success requires truly ‘going in'
Chinese companies are accelerating their global expansion, driven primarily by two forces. The first is technology. Amid tightening restrictions in the West, especially the United States, many Chinese firms struggle to access critical technologies, equipment, industrial software and even raw components. Without breakthroughs, China's manufacturing risks a long-term decline. A growing number of scientists, engineers and executives have taken the leap into entrepreneurship, often developing 'me too' or 'me better' products as import substitutes . Faced with the limits of domestic demand, however, companies are being pushed overseas for scale and survival. In theory, they should feel welcome abroad due to their cost-effective solutions. But their motives are often met with suspicion amid geopolitical tensions. The European Union, for instance, has tightened its screening of foreign investment , a move seen as targeting Chinese companies in sensitive sectors such as artificial intelligence and semiconductors The second driver behind Chinese firms going global is their repositioning in supply chains. Many small and medium-sized companies act as suppliers to multinationals. As these supply chains shift and restructure, those who fail to keep up risk being left behind. In a sense, Chinese companies are being pushed overseas by dual challenges: razor-thin margins from cutthroat domestic competition and an over-reliance on foreign orders. For many, overseas expansion is the only viable path. This supply chain-driven globalisation faces growing scrutiny. Western nations, led by the US, are not only tracing the origins of imports but also tracking investment sources. For Chinese companies, the key challenge lies in how to climb higher in the value chain.
South China Morning Post
12-07-2025
- Business
- South China Morning Post
Chinese law firms in ‘pivotal moment' as they answer the call to go global
Chinese lawyers are making inroads into the global legal services market in response to growing demand from their compatriots abroad and a push from Beijing. Advertisement They say that as more Chinese companies expand their footprint overseas many prefer to get legal support from Chinese lawyers and have more trust in them, but winning over clients from elsewhere is a challenge at a time of rising geopolitical tensions. Beijing has been pressing for more legal professionals to offer their services abroad to protect Chinese assets as its mega trade and investment strategy the Belt and Road Initiative marches into a second decade. As of last year, Chinese law firms had established some 207 offices overseas – more than 35 per cent of them located in countries involved in the belt and road strategy , the Ministry of Justice said in April. That marked an increase of 70 per cent from 2018, when there were 122 Chinese legal offices abroad. 02:48 Chinese President Xi Jinping unveils 8-point vision for nation's Belt and Road Initiative at forum Chinese President Xi Jinping unveils 8-point vision for nation's Belt and Road Initiative at forum 'Lawyers play an important role in supporting Chinese companies in their global expansion and it's essential for us to stay attuned in these changing times and to respond proactively,' said Liu Zhiqiang, a lawyer and executive director of Yingke Law Firm's office in Budapest, Hungary.
