Seven & I Holdings – the company that operates the 7-Eleven convenience store chain – rejected a rival’s acquisition offer, citing the offer price as too low.
In a statement on September 6, Seven & I Holdings said it would “openly and sincerely consider” any proposal that would be in the best interests of shareholders. “However, we will also reject proposals that do not accurately assess the true value of the company or do not address legal concerns,” the statement said.
They confirmed that Alimentation Couche-Tard (Canada) – the parent company of the Circle K convenience store chain – wants to buy all outstanding shares of Seven & I for $14.86 a unit. The deal is worth $38.5 billion, according to Reuters calculations. Alimentation Couche-Tard will pay in cash.
A 7-Eleven store in Tokyo (Japan). Photo: Reuters
Seven & I shares surged 20% after news of the deal broke last month, pushing the company’s market capitalization above $38 billion. If completed, it would be the largest foreign acquisition of a Japanese company and the largest cross-border acquisition globally this year, according to financial data firm Dealogic.
Alimentation Couche-Tard currently has about 17,000 stores in 30 countries, under the Couche-Tard and Circle K brands. The company is listed on the Toronto Stock Exchange with a market capitalization of 80 billion Canadian dollars ($58.5 billion). They approached Seven & I with an acquisition proposal in 2020.
Alimentation Couche-Tard is expected to generate $69.2 billion in revenue for the fiscal year ending April 2024. Seven & I is expected to generate 11 trillion yen ($75 billion) in revenue for the fiscal year ending February 2024.
If the merger goes through, the combined company would control nearly 20% of the U.S. convenience store market, a move that could draw the attention of U.S. antitrust regulators.
Currently, Seven & I has 85,000 convenience stores in 20 countries. They want to expand this number to 100,000 in 30 countries and territories by 2030. In 2021, Seven & I bought Speedway – a company that operates a chain of convenience stores at gas stations in the US for $21 billion.