Seven & i weighs $50bn takeover as FTC scrutiny, store divestitures, and competition concerns grow
Alimentation Couche-Tard Inc. and Seven & i Holdings Co. have given potential buyers until March 31 to submit initial expressions of interest for a package of US convenience stores, according to BNN Bloomberg.
Sources familiar with the matter said buyers must also demonstrate how they will address antitrust concerns as talks between the two companies continue.
Some interested buyers have already signed non-disclosure agreements and entered the process. The discussions follow Couche-Tard’s nearly US$50bn bid to acquire Seven & i, the Japanese parent of 7-Eleven.
Seven & i has previously resisted the approach through a management buyout attempt and internal business restructuring but has since agreed to consider the proposal if regulatory hurdles can be addressed.
The companies are discussing the potential sale of US stores to help alleviate antitrust scrutiny.
A merger would result in a combined network of more than 20,000 outlets, significantly ahead of their nearest competitor, Casey’s General Stores Inc., and would require regulatory review.
Seven & i board directors Paul Yonamine and Meyumi Yamada wrote in a public letter that “a combination of Seven & i and Alimentation Couche-Tard would face significant antitrust hurdles.”
The companies are reportedly working on a divestiture plan covering more than 2,000 overlapping stores.
Yonamine and Yamada stated: “As responsible stewards of our shareholders’ capital, we will not blindly enter a transaction with no clear path to closing that could leave our company in a value destructive limbo for multiple years.”
They referenced the failed US$26.4bn Kroger–Albertsons deal as a cautionary example for large-scale retail divestitures lacking strong buyers.
Couche-Tard responded in a statement, claiming there is a “clear path to regulatory approval in the US,” citing the “highly fragmented” nature of the convenience store industry, which includes over 150,000 stores across the country.
The Federal Trade Commission (FTC), which shares responsibility for antitrust enforcement in the US with the Department of Justice, is not formally investigating Couche-Tard’s proposal but is monitoring developments.
Last week, FTC staff met with lawyers for Seven & i at the commission’s request to receive updates on the deal.
The FTC has previously required both Couche-Tard and 7-Eleven to divest assets in earlier mergers and later accused them of violating those settlements, indicating ongoing regulatory oversight of both firms.
Andrew Ferguson, the new FTC chair, told Bloomberg News this week he would oppose any deal deemed anti-competitive.
“Consumers and laborers suffer in markets short of things that just affect short-term price and output,” he said.
Under US President Donald Trump’s administration, regulators have already intervened in two high-profile deals, including Hewlett Packard Enterprise Co.’s US$14bn acquisition of Juniper Networks Inc.
Shares of Couche-Tard rose 0.7 percent on Thursday morning in Toronto following a 6.3 percent gain on Wednesday. The company’s market capitalisation stands at approximately $68bn.
According to RBC Capital Markets analyst Irene Nattel, Couche-Tard is expected to “continue the courtship over the next eight weeks until the Seven & i annual general meeting on May 27, potentially reassessing thereafter depending on the outcome of the shareholder meeting.”
Both Seven & i and Couche-Tard declined to comment.
