Founder of Canadian retail giant ACT lands in Tokyo: if Seven & i cooperates, the $47 billion acquisition price may be raised

The Zhitong Finance App learned that the founder of Canadian convenience store giant Alimentation Couche-Tard said on Thursday that if Japan's 7-11 parent company Seven & I Holdings shows a more positive cooperative attitude and provides more detailed financial information, its $47 billion purchase price may increase further.

This is the first time the Canadian company has held a press conference in Japan since launching a takeover offer in August last year. Couche-Tard Chairman Alain Bouchard said at a press conference that the company's restructuring strategy is shifting to public shouting due to months of stalemate in negotiations with Seven & I. Previously, Seven & I had always refused to open data on the grounds of antitrust review, and established a separate new CEO to implement a restructuring plan as an alternative.

The press conference, which attracted about 120 Japanese journalists, marked the beginning of an active attack by low-key Canadian convenience store operators. Bouchard emphasized that “with a deeper understanding of the synergy, we have an opportunity to optimize the offer”, but “unfortunately we have not been able to obtain any core information so far”.

People familiar with the matter revealed that Seven & I requires the acquirer to first submit a detailed antitrust divestiture plan including specific stores, schedules, and trusted buyers, otherwise it will not start sharing confidential information. However, the sudden resignation of the two independent directors this week was viewed by US shareholder Artisan Partners as a sign of “corporate governance failure,” and the agency continues to call on Japan to actively engage.

According to the latest disclosure, Couche-Tard's Japanese yen quotation ($18.19 per share) submitted in January of this year is basically the same as the previous US dollar price, with a 23% premium over Japan's current stock price. If the deal is completed, it will be the largest foreign merger and acquisition in Japanese history.

Faced with Japanese people's concerns about the possible decline in the quality of 7-11 fresh food, Couche-Tard CEO Alex Miller promised to keep the local fresh food research and development team. In response to the special role of convenience stores in Japan's post-disaster emergency response system, Couche-Tard set up a Japanese-English bilingual website to win support from the Japanese public by promoting the benefits of this deal and the Canadian company's experience in storing supplies for hurricane relief in US stores.

Antitrust concerns

The antitrust issue remains the biggest obstacle. The two sides have a total of about 20,000 stores in the US. The friction between the two sides in recent weeks has mainly focused on anti-monopoly barriers that the US may face, although the two companies are currently cooperating to find potential buyers to divest their stores in order to maintain competition.

Miller said on Thursday that the cooperation between the two sides has been constructive so far, but the process has taken too long.

Couche-Tard management's trip to Tokyo and contacts with Seven & I on antitrust issues highlighted the efforts of deal makers to ensure the certainty of the deal in the context of US regulatory scrutiny.

The transaction advisor said that detailed divestment discussions for antitrust purposes are not common in transactions before a deal is agreed upon or any confidentiality agreement is signed.

Kathy O'Neill, partner at Fried Frank Law Office, said, “I have never seen a case like this: before the merger agreement was executed, the entire divestment plan and the buyer were finalized and included in the merger agreement.”

However, she said that drawing up a divestment plan before reaching a merger agreement may help reduce the risk of accidents and the time and effort invested in reaching a deal.

7-Eleven parent company's “combo punch” resists takeover

Facing a $47 billion foreign takeover offer, Seven & i Holdings, the parent company of the Japanese 7-Eleven convenience store chain operator, announced a change of CEO and plans to restructure its business. The company previously said that chief outside director Stephen Dacus will replace Ryuichi Isaka (Ryuichi Isaka) as CEO on May 27. This is the first time that the company is headed by a foreign executive. The retail group also said it will repurchase shares worth around 2 trillion yen (US$13.4 billion) by fiscal year 2030 and seek to list its North American convenience store subsidiary by the second half of 2026.

Furthermore, Seven & i, which owns more than 80,000 7-11 convenience stores in 20 countries and regions, said it has agreed to sell its supermarket division to Bain Capital for 814.7 billion yen and sell its shares in Seven Bank to less than 40%. Bain said on Thursday that it plans to list the supermarket division called York Holdings within about three years after expanding the scale through acquisitions.