Couche-Tard wants to become the largest convenience store operator in the world by buying the Japanese convenience stores 7-Eleven. An acquisition that would also make it one of the largest retailers on the planet. Couche-Tard made a $39 billion takeover offer for Seven & i Holdings, which the Japanese retailer declined.
It is expected that Alain Bouchard, its executive president, will return to the charge. The Caisse de dépôt et placement du Québec, already a shareholder of Couche-Tard, has also indicated that it could financially support the operation.
Seven & i Holdings has rejected the offer saying it “significantly undervalues” the company and is therefore not in the interests of its shareholders.
The acquisition would face regulatory restrictions in Japan and the United States where the Federal Trade Commission will have to approve the transaction. Couche-Tard said it was ready to divest itself of other American assets to obtain the green light. In 2021, the French government opposed its acquisition of major French grocery chain Carrefour citing the need to protect the country’s food security. It’s hard to see how.
Alain Bouchard founded Alimentation Couche-Tard by acquiring his first convenience store 44 years ago in Laval. Since then, relentless acquisitions have made Couche-Tard one of the largest companies in Canada, a global convenience store giant with $60 billion in revenue and 130,000 employees. The company operates more than 16,000 convenience stores in 24 countries in North America and Europe, primarily under the Couche-Tard, Circle K and On The Run brands.
7- Eleven, a big bite
The Japanese group that Bouchard wants to buy operates 55,000 convenience stores in 21 countries. 7-Elevens are the largest convenience stores in Japan. Clean and bright, they’re full of fresh, affordable ready-to-eat foods. Known as “konbini”, they are an integral part of the daily life of tens of millions of Japanese people.
The socio-cultural status of 7-Elevens in Japanese society will make it more difficult for Japan to sell them to foreign interests despite the country’s recent openness to such acquisitions.
And what’s more, Seven & i Holdings is a conglomerate whose activities extend well beyond convenience stores, including banking services. This exposes the acquisition to greater scrutiny from the Japanese government.
Transformer GAFA in GAFAC
Couche-Tard’s acquisition of 7-Eleven would be the largest corporate deal since Elon Musk bought Twitter for more than US$40 billion in 2022, according to a group of British financial analysts.
If the Couche-Tard acquisition were successful, it would not only represent the largest foreign acquisition of a Japanese company in history, but would also create one of the largest retail groups in the world.
Alain Bouchard undoubtedly dreams of Couche-Tard joining the world-famous GAFA (acronym for Google, Amazon, Facebook and Apple) which would then become GAFAC.
