London (CNN) — The Canadian owner of Circle K convenience stores has made a bid to buy 7-Eleven in what would be the biggest foreign takeover of a Japanese company on record and the largest cross-border acquisition this year.
In a statement Monday, Seven & I Holdings, the operator of 7-Eleven, confirmed it had received an offer from Canada’s Alimentation Couche-Tard to acquire all of its outstanding shares.
Seven & I said it had formed a “special committee” to evaluate the proposal and that no decision had yet been made.
“The special committee intends to conduct a prompt, careful, and comprehensive review of the proposal, the (Seven & I’s) stand-alone plans, and other alternatives for enhancing corporate value, after which a response will be made to (Couche-Tard),” it added.
Couche-Tard confirmed what it called a “friendly” proposal to acquire Seven & I, but said “there can be no certainty” that a deal will be struck. “The company is focused on reaching a mutually agreeable transaction,” it added in a statement. It did not disclose financial details.
Shares of Seven & I closed almost 23% higher in Tokyo Monday, pushing the company’s market value above $38 billion. That suggests a deal value in excess of any other foreign-led takeover in Japan since Dealogic started collecting data in 1995. It would also be the largest cross-border takeover globally in 2024, according to Dealogic.
The takeover bid comes after the Japanese government made it harder for companies to ignore unsolicited offers. The changes to corporate takeover guidelines are expected to boost foreign investment into the country.
If the deal goes ahead, it will expand Couche-Tard’s already impressive footprint across North America, where it operates Couche-Tard and Circle-K convenience stores, and Europe, where it also runs Ingo fuel retailers.
The combined entity would control almost a fifth of the US convenience store market, according to Neil Saunders, managing director of GlobalData. That level of concentration “will almost certainly attract” scrutiny from America’s antitrust regulator, the Federal Trade Commission, he said.
“The other potential barrier to a merger will be the complexity of buying a Japanese firm. Although there have been reforms in the country to make takeovers easier, most Japanese firms are very cautious and resistant to change,” he added.
Couche-Tard has made several acquisitions over the past decade, although this takeover would be the biggest by far. It comes more than three years after its failed attempt to buy the Carrefour supermarket chain in 2021 when the French government blocked the deal.
Seven & I Holdings operates more than 83,000 stores around the world, including 7-Eleven shops and the Speedway chain of gas stations in the United States. The group bought Speedway from Marathon Petroleum for $21 billion in 2021, boosting its presence in North America.
Although 7-Eleven traces its origins to Dallas, Texas, it is the late Japanese entrepreneur Masatoshi Ito who is credited with turning it into a global brand that sells everything from yoghurt to ready-made meals and medicines. Ito died last year at the age of 98.
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