💰 Rejected $38B Offer
Seven & i Holdings, the Japanese owner of 7-Eleven, has turned down a $38B buyout offer from Canadian company Alimentation Couche-Tard (ACT). The offer, at $14.86 per share, was 20% above the current stock price. However, 7-Eleven said the offer undervalued their potential and posed serious regulatory risks. The deal could have merged 7-Eleven's 85,000 stores with ACT’s 17,000, creating a massive 100,000-store global chain. This would be the largest acquisition of a Japanese firm by a foreign company.
📉 Valuation and Timing Concerns
7-Eleven’s board, led by Stephen Dacus, called the offer "opportunistically timed" as the Japanese yen remains weak. Dacus said it "grossly undervalued" the company, noting that Seven & i had significant growth potential. ACT’s bid followed Japan's new M&A guidelines, which recommend companies evaluate serious buyout offers. Still, ACT’s proposal faced a challenging regulatory path, especially in the US.
🌏 Strategic Importance
7-Eleven is a crucial asset in Japan's economy, and Neil Newman, head of strategy at Astris Advisory, said, "Japan needs to protect its national assets." The buyout would mark a turning point in Japanese corporate culture, which historically involved Japanese firms acquiring foreign companies, not the reverse. If ACT succeeds, it may signal Japan’s openness to foreign investments in large domestic brands.
🛑 Regulatory Hurdles
Beyond valuation, 7-Eleven flagged “significant challenges” in clearing the deal with US regulators. A combined ACT and 7-Eleven would control an extensive market share in North America, raising antitrust concerns. Despite rejecting the offer, 7-Eleven remains open to continued negotiations, leaving room for a higher bid from ACT. ACT did not immediately respond to requests for comment.
What do you think about Japan’s protection of its assets?
