The recent decision by Couche-Tard, the operator of Circle K, marks the conclusion of a year-long endeavor to establish a global convenience store giant through the acquisition of 7-Eleven. This strategic move comes after multiple attempts to secure a deal with Seven & i Holdings, the parent company of 7-Eleven, which have been met with obstacles and a lack of constructive engagement.
In a letter addressed to its board of directors, Couche-Tard expressed frustration over the absence of sincere or meaningful discussions from 7&i that could facilitate the progress of any acquisition proposal. Despite public statements from 7&i representatives suggesting a willingness to negotiate, Couche-Tard indicated that their interactions had not been productive.
Initially, Couche-Tard raised its acquisition offer to $47 billion, an increase from the previous $38.5 billion offer made in October of the prior year. In March, the company further suggested it would enhance this offer if the Japanese firm collaborated and disclosed more financial data. Additionally, Couche-Tard had proposed a store sale plan designed to alleviate potential regulatory concerns regarding the merger.
Couche-Tard's efforts to solidify the acquisition gained momentum after a competing bid of $58 billion from the founding family of Seven & i Holdings fell through due to financing issues. Earlier this year, both companies had signed a non-disclosure agreement (NDA), but Couche-Tard described the scope of due diligence as minimal, with only limited management meetings allowed.
In the letter, Couche-Tard emphasized the lack of visibility regarding when or if they would receive additional information necessary for proceeding with the acquisition. The company expressed its intent to acquire all of 7&i's business outside of Japan, along with a 40% stake in the Japanese market, where convenience stores play a critical role in supporting communities, especially during natural disasters.
Couche-Tard's letter concluded with a clear message: without deeper and more genuine engagement from the leadership of 7&i and their special committee, the company would be unable to effectively pursue the proposed acquisition. This development highlights the complexities and challenges faced in the highly competitive convenience store industry.
Reporting by Savyata Mishra in Bengaluru; Editing by Shailesh Kuber and Sonali Paul.
