The operator of 7-Eleven, Seven & I Holdings, has rejected an initial bid from rival convenience store chain Circle K, claiming the offer was too low for its global business. The potential deal was reportedly worth $38.5 billion, with a per-share offer of $14.86 in cash. Seven & I expressed openness to considering a higher bid that would benefit its shareholders, but stated they would resist any proposal that undervalues the company or fails to address regulatory concerns.
Since news of the acquisition offer broke, Seven & I’s stock has rallied, surpassing a market value of $38 billion. This has fueled speculation of a potentially higher bid from Circle K’s owner, Alimentation Couche-Tard. The possible merger would have resulted in one of the largest foreign-led takeovers in Japan since 1995, as well as the biggest cross-border deal globally this year. The bid has been closely monitored in Japan, particularly following changes in corporate takeover guidelines that aim to increase foreign investment in the country.
A merger between the two convenience store giants would have expanded Couche-Tard’s presence in North America and Europe, where it already operates numerous stores. Analysts raised concerns about the potential impact on competition in the US convenience store market, as the combined entity would control a significant share of the sector. Seven & I acknowledged these antitrust concerns, highlighting the challenges the transaction would face from US competition regulators.
Seven & I Holdings, based in Tokyo, operates over 83,000 stores worldwide, including 7-Eleven outlets and Speedway gas stations in the US. The company acquired Speedway from Marathon Petroleum for $21 billion in 2021, further solidifying its presence in North America. Despite 7-Eleven’s American roots, it was a Japanese entrepreneur, Masatoshi Ito, who transformed the brand into a global icon. Ito passed away last year at the age of 98, leaving behind a legacy of success and innovation in the convenience store industry.
The rejection of the initial bid from Circle K’s owner, coupled with the potential for a higher offer, has placed Seven & I in a strategic and advantageous position as discussions around the proposed merger continue. The company’s emphasis on protecting shareholder value and addressing regulatory concerns reflects its commitment to making decisions that align with the best interests of all stakeholders involved. The outcome of these negotiations could have far-reaching implications for the convenience store market and global business landscape as a whole.
