Canadian convenience store giant makes $38 billion bid to buy 7-Eleven

Alimentation Couche-Tard (ACT), the owner of Circle K, has made a $38 billion offer for 7-Eleven, potentially marking the largest foreign takeover in Japan’s history. 

The Canadian company submitted its bid for the popular convenience store chain, which has a strong presence across Asia and North America, on Monday.

If the deal goes through, ACT’s network in the US and Canada could expand significantly, increasing its number of locations to over 20,000. This development follows a period of unprecedented volatility in the Japanese stock market earlier this month.

The offer, amounting to 5.6 trillion yen, values 7-Eleven at 20% above its market price before the bid. ACT described its proposal as “friendly, non-binding,” and pointed out that there is no certainty the deal will be finalised. The company stated it is committed to achieving a transaction that benefits the customers, employees, franchisees, and shareholders of both firms.

Seven & i Holdings, the Tokyo-based parent company of 7-Eleven, has acknowledged receiving ACT’s proposal. The company has established a special committee to evaluate the offer, noting that it will undertake a thorough review before making any decisions.

Should an agreement be reached, regulatory scrutiny from competition authorities in North America could present challenges. Currently, 7-Eleven operates over 13,000 stores across the U.S. and Canada, while Couche-Tard has more than 9,000.

In recent years, activist investors have pushed Seven & i to divest certain assets and concentrate on its core 7-Eleven brand. The takeover bid coincides with recent upheavals in the Japanese stock market, which experienced a sharp downturn followed by a rapid recovery after the central bank raised interest rates.

7-Eleven was introduced to Japan in 1974 by retail magnate Masatoshi Ito, who passed away in 2023 at the age of 98. It is credited with transforming 7-Eleven into a global retail giant. Today, 7-Eleven operates 85,000 stores in 20 countries, with a strong presence in Asia.

Quebec-based ACT, listed on the Toronto Stock Exchange, operates around 17,000 stores across North America, Europe, and Asia under the Circle K and Couche-Tard brands, with a market value of approximately 80 billion Canadian dollars ($58.2 billion).

For most of its nearly 100-year history, 7-Eleven was an American brand, expanding internationally through franchises. In 1974, the Japanese firm Ito-Yokado opened the first 7-Eleven in Japan, and by 1991, it had acquired a 70% stake in the chain’s US parent company. 

Renamed Seven & i Holdings in 2005, the company has retained its Japanese identity, but this latest bid raises questions about whether more Japanese firms might become targets for foreign takeovers.