Canadian convenience store giant, Couche-Tard, abandons US$47 billion acquisition proposal for 7-Eleven chain in the U.S.
Alimentation Couche-Tard (ACT), a leading Canadian convenience store company known for its brands like Circle K, has officially withdrawn its $47-billion takeover proposal for Seven & i Holdings, the parent company of 7-Eleven. The decision ends a months-long pursuit that began last year when ACT first made an offer for the Japanese company.
The withdrawal comes after ACT accused Seven & i of a "persistent lack of good faith engagement" and running "a calculated campaign of obfuscation and delay." In a letter to Seven & i’s board, ACT claimed that since signing a non-disclosure agreement in April, there had been no sincere or constructive engagement from Seven & i that would help advance any proposal.
Seven & i, however, disagreed with ACT’s characterization of the negotiations and reaffirmed its belief that its special committee had acted in good faith. The company pointed to significant changes in the global economy, exchange rates, and financing markets as contributing factors, noting that market conditions have deteriorated since the initial bid. Seven & i also emphasized the "extraordinary antitrust hurdles" and the "protracted timeframe" required to navigate regulatory approvals as practical challenges to any deal.
Seven & i had previously taken defensive actions, including a large share buyback, an IPO of its U.S. unit, and the appointment of its first foreign CEO, to fend off the takeover bid from ACT. Despite the collapse of the deal, both companies remain global leaders in the convenience store sector. Seven & i operates about 85,000 stores worldwide, while ACT runs nearly 17,000 outlets, including Circle K.
Here's a summary of the current status:
| Aspect | Alimentation Couche-Tard (ACT) Position | Seven & i Holdings Position | |-------------------------|------------------------------------------------|--------------------------------------------------| | Takeover Bid Status | Withdrawn ($47 billion proposal) | Acknowledged withdrawal, expressed disappointment| | Reason for Withdrawal | Alleged lack of engagement, obfuscation, delay | Claims of good faith, cites market changes, antitrust hurdles | | Immediate Actions | Sent withdrawal letter to board | Issued public statement, defended actions | | Long-term Impact | Ends bid, maintains global presence | Continues as a leading Japanese multinational |
ACT began with one store in Quebec in 1980 and has grown to become a major player in the convenience store industry. Around a quarter of Seven & i's outlets are located in Japan, where the company sells a variety of products including concert tickets, pet food, and fresh rice balls, although sales have been flagging.
Despite the end of the takeover bid, the withdrawal marks a significant chapter in the ongoing competition between these two global giants in the convenience store sector.
In the wake of the withdrawal, Alimentation Couche-Tard (ACT) has decided to focus its efforts on the convenience store industry in Malaysia and other regions, aiming to expand its financial and business influence. Seven & i Holdings, with its strong presence in Japan, is also expected to engage in competitive business maneuvers to maintain its dominance in the global finance and retail sector, particularly in the convenience store industry.
