In a major shake-up in the global retail sector, Seven & I Holdings, the operator of 7-Eleven stores worldwide, has rejected a $38.5 billion acquisition bid from Alimentation Couche-Tard, the Canadian company behind Circle K. The proposal, which valued Seven & I shares at $14.86 each, was deemed insufficient by the Japanese firm, which cited concerns over both the offer’s valuation and the regulatory challenges it would face.
Seven & I, which operates more than 83,000 stores globally, including 7-Eleven locations and the Speedway gas station chain, indicated on Friday that it was open to considering offers in the best interest of its shareholders. However, the company emphasized that the current proposal undervalued its business and failed to account for significant regulatory risks, particularly in the U.S. “We will oppose any proposal that fails to recognize our intrinsic value or that neglects to address serious regulatory concerns,” the company stated.
The rejected offer was set to be one of the largest foreign-led acquisitions of a Japanese company, and if completed, it would have marked the biggest cross-border merger of 2023. A successful deal would have significantly expanded Couche-Tard’s reach in North America, where it already operates thousands of Circle K stores. The combined entity would have controlled nearly 20% of the U.S. convenience store market, a scenario that analysts say would likely trigger a rigorous review by antitrust regulators.
Seven & I pointed to these regulatory hurdles as one of the key reasons for rejecting the offer. Having already strengthened its position in the North American market with its $21 billion acquisition of Speedway in 2021, Seven & I is keenly aware of the scrutiny such a merger would attract. Analysts believe the regulatory environment in the U.S. would present considerable challenges for a deal of this magnitude.
The bid also comes at a time when Japan is seeing changes in its corporate governance framework, making it harder for companies to dismiss unsolicited offers. These changes are part of a broader initiative to encourage foreign investment in Japan, a country that has historically been somewhat resistant to foreign takeovers.
Despite rejecting the initial offer, Seven & I’s stock has surged in recent weeks, pushing its market valuation above $38 billion. There is speculation that the Japanese company may be open to a higher offer, with reports suggesting that negotiations could continue if Couche-Tard improves its bid.
Although 7-Eleven was originally founded in Dallas, Texas, it has become closely associated with Japan, thanks largely to the efforts of the late Masatoshi Ito. Ito, who passed away in 2022, is credited with turning 7-Eleven into a global brand and a dominant player in the convenience store industry. His vision continues to shape the company, which remains one of the most recognizable retail brands in the world.
