Couche-Tard's revised offer values Seven & i at US$47bn, 22% higher than its initial proposal
Alimentation Couche-Tard, the Laval, Quebec-based company behind Circle K, has made another move in its ongoing effort to acquire the Japanese company that owns its rival, 7-Eleven.
According to BNN Bloomberg, on Wednesday, Seven & i Holdings Co. Ltd. announced it had received a revised confidential, private, and non-binding proposal from Couche-Tard.
The proposal follows Couche-Tard’s August offer, which valued Seven & i at US$38.6bn. That offer was rejected by the Japanese company, which stated it “grossly undervalues” its convenience store business and fails to address US regulatory concerns.
The latest bid is reported by Bloomberg and Reuters to value Seven & i at US$47bn, representing a 22 percent increase over the previous offer. Couche-Tard has not confirmed details of the proposal.
Despite the earlier rejection, Couche-Tard remains focused on reaching an agreement, noting the strategic and financial benefits of acquiring Seven & i.
The acquisition would add 85,800 stores to Couche-Tard’s existing network of more than 16,800 stores in 31 countries. Seven & i operates a diverse portfolio that includes not only 7-Eleven, but also supermarkets, food producers, and financial services companies.
However, significant challenges remain. Regulatory scrutiny is expected, particularly from the Federal Trade Commission, due to concerns about market concentration.
Neil Saunders, managing director of GlobalData, noted that current negative sentiment surrounding consolidation in the food and essentials space could complicate the deal.
Additionally, Japanese sentiment poses another hurdle, with the country’s firms typically cautious and resistant to change. Last month, Seven & i was classified as ‘core’ to Japan’s national security, further complicating Couche-Tard’s pursuit.
This is not the first time Couche-Tard has encountered obstacles in its acquisition efforts.
Three years ago, the company attempted to buy French grocer Carrefour SA but was forced to withdraw after French finance minister Bruno Le Maire blocked the US$25bn deal, citing concerns over food security.
If the Seven & i deal does not proceed, it would be another setback for Couche-Tard’s ambitious growth plans. However, the company has indicated its continued interest in reaching a mutually beneficial agreement.
