Canada’s Alimentation Couche-Tard (ATD) has bid $31 billion U.S. to acquire Japan’s Seven & i Holdings Co. (TYO: 3382), which operates the rival 7-Eleven convenience store chain.
Seven & i Holdings Co. is much larger than Laval, Quebec-based Couche-Tard. If the acquisition is successfully completed, it would be the biggest foreign takeover ever of a Japanese company.
The merged companies would create the world’s top operator of convenience stores with more than 100,000 outlets, including the “Circle K” brand that Couche-Tard operates.
Couche-Tard currently runs about 14,000 convenience stores, mostly in Canada and the U.S. By comparison, Seven & I operates 85,000 7-Eleven outlets worldwide.
In a news release, Seven & i Holdings said the bid from Couche-Tard is preliminary and non-binding.
A special committee of independent outside board directors will be established to review the proposal and decide if it is worth pursuing, said Seven & I Holdings.
Foreign takeovers of Japanese companies have been rare in the past. But recent changes to the rules around mergers and acquisitions has opened the door to foreign deals, say analysts.
While based in Tokyo, Seven & i gets three-quarters (75%) of its revenue from North America compared with only 25% in its home market of Japan.
Seven & i Holdings has been targeted by activist investors in recent months, with calls for the company’s chief executive to step down amid a prolonged underperformance of the stock.
Couche-Tard has been expanding outside of Canada through acquisitions. In 2023, it bought 2,200 gas stations in Europe from TotalEnergies (TTE) for €3.1 billion ($3.42 billion U.S.).
Any merger of the companies will face regulatory scrutiny as the companies are the two biggest convenience-store operators in North America.
Prior to today (Aug. 19), the stock of Alimentation Couche-Tard had risen 7% this year to trade at $83.57 per share.
The stock of Seven & i Holdings is up 23% in Asian trading on news of the takeover offer, bringing its year-to-date gain to 15%. The stock trades in the Japanese yen currency.
