Couche-Tard Eyes Seven & i Deal Despite Japanese Retailer’s Hesitation

Canada’s Alimentation Couche-Tard remains steadfast in its pursuit of Japanese retail giant Seven & i Holdings, expressing confidence in its ability to navigate U.S. regulatory obstacles, according to Reuters. The Laval, Quebec-based convenience store operator has been working to secure a deal despite facing resistance from Seven & i, which has been hesitant to engage extensively in negotiations.

In August, Couche-Tard initially proposed a $39 billion acquisition offer for the Japanese retailer, prompting the Tokyo-based company to form a special committee of independent directors to evaluate the bid. According to Reuters, the committee deemed the offer insufficient, stating that it “undervalues” the company. In response, Couche-Tard increased its offer in October to $47.2 billion, signaling its commitment to the deal.

The pursuit continued into the new year, with Couche-Tard submitting a third, revised bid on January 24. This latest proposal, which was denominated in yen and remained non-binding, was intended to reaffirm the Canadian company’s continued interest in the acquisition. However, Couche-Tard has not disclosed the specific amount of the bid, per Reuters.

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If this deal proceeds, it would become the largest acquisition of a Japanese company by a foreign buyer in history. However, in addition to potential U.S. regulatory hurdles, the proposed takeover is expected to face scrutiny in Japan as well, with two mergers and acquisitions lawyers noting that the transaction could come under review under the country’s Foreign Exchange and Foreign Trade Act.

Despite its persistent efforts, Couche-Tard has encountered challenges in advancing discussions with the Japanese retailer. The owner of Circle K expressed frustration over what it perceives as the company’s “limited engagement” in the negotiation process. Nevertheless, Couche-Tard maintains optimism that a resolution can be reached and believes there is a “clear path” to address regulatory concerns in the United States, which has been a key consideration in the proposed deal.

Source: Reuters