Alimentation Couche-Tard Execs Offer Assurances on a Seven & i Acquisition: Report

Photographs courtesy of Alimentation Couche-Tard

Alimentation Couche-Tard Inc. is interested in buying the “entirety” of Seven & i Holdings Co. Ltd. and will keep the local operations of the Japanese convenience-store and retail company intact, founder and Chairman Alain Bouchard told Bloomberg in an interview in Tokyo on Thursday. New Couche-Tard CEO Alex Miller, former CEO Brian Hannasch and CFO Filipe Da Silva also took part in the interview.

Couche-Tard in August submitted a “friendly,” nonbinding proposal to Seven & i to acquire all outstanding shares of the 7-Eleven Inc. parent. Seven & i confirmed at the time that it had received the confidential, nonbinding and preliminary acquisition proposal, and its board formed a special committee of independent outside directors to review it. Seven & i has rejected the initial proposal twice, saying it “undervalues” the company.

Couche-Tard has since raised its offer, from $14.86 per share or approximately $39 billion, to $18.19 per share or approximately $47.2 billion. The new bid is a 22% premium over the initial bid.

Seven & i announced a restructuring plan last week to spin off its noncore supermarket, food, specialty store and other businesses and to divest 444 underperforming “non-core” c-stores in North America to allow it to focus more on its convenience-store business.

This week, investment firm Artisan Partners International sent a letter to the Seven & i board urging it to respond “without delay” to the enhanced acquisition bid. The letter claims that the restructuring plan is a tactic “designed to impede and drive away a bona fide bid.”

Seven & i management did not meet with the Couche-Tard executives during their trip to Japan, said Bloomberg.

“We have invited them, we have tried to organize a meeting, but it didn’t work, but it will eventually,” Bouchard told the news agency. “We also want to gain a better understanding of the Japanese culture, but mainly [about] the Japanese concerns [around the deal]. We want to obviously introduce ourselves because people don’t know us.”

A spokesperson for Seven & i told Bloomberg that they have kept any discussions with Couche-Tard private and will continue to do so. “We will continue to respond sincerely to discussions that fully recognize the intrinsic standalone value of our business and also address our regulatory concerns,” the spokesperson said.

Based on past experience, Bouchard is confident of the company’s ability in working with the U.S. Federal Trade Commission (FTC) to address antitrust regulatory concerns over a deal that would create the biggest convenience-store company in the world, said the report. 

Seven & i’s effort to have the company designated as a national “core business” in Japan, essential to national security, will not make an acquisition harder, Miller told the news agency. He said Couche-Tard would not “tear up” one of the country’s most beloved brands. Since many U.S. 7-Elevens do not sell gasoline, they wouldn’t directly compete with Couche-Tard’s own Circle K c-stores that do sell fuel, Bouchard added.

“We don’t change the model. We adapt. We take the best practices from the stores we acquire, or we combine, and we take our best practices together,” Bouchard said. “We’ll keep the people that run this company here, and they will hopefully share our culture, and we will share their culture, and we will be just strong,” he said, adding that no Canadian executive would be “parachuted” into Japan to take over the local operations.

• 7-Eleven is No. 1 on CSP’s 2024 Top 202 ranking of U.S. c-store chains by store count. Alimentation Couche-Tard is No. 2.

Tokyo-based Seven & i is a global operator of convenience stores, superstores, supermarkets, specialty stores, foodservices, financial services and IT services. 7–Eleven International LLC franchises or licenses more than 44,000 stores in 19 countries and regions, The brand also operates corporate or franchise stores in the United States, Canada, Mexico and Japan. Globally, the 7-Eleven trademark is represented in approximately 83,000 stores.

Irving, Texas-based 7-Eleven Inc. operates, franchises or licenses more than 83,000 convenience stores in 19 countries and regions, including more than 13,000 7-Eleven convenience stores in the United States.

Laval, Quebec-based Couche-Tard operates in 31 countries and territories, with more than 16,700 stores. Its network includes more than 7,100 stores in the United States under the Circle K and Holiday Stationstores banners, and approximately 2,100 in Canada under the Circle K and Couche-Tard banners.

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Greg Lindenberg has been covering convenience-store news and writing about the c-store and gas station industries for more than a quarter of a century. He specializes in mergers-and-acquisitions (M&A) news.

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