Sept 6th UPDATE: From Investopedia, Originally From CNBC
Article:
By Nisha Gopalan Published September 06, 2024 12:10 PM EDT
Key Takeaways
Japan's Seven & i rejected a $39 billion takeover bid from Canada's Alimentation Couche-Tard.
The rejection leaves the 7-Eleven chain operator open to another bid by the owner of the Circle K convenience store brand.
The Tokyo-based firm said that Alimentation Couche-Tard’s offer “grossly undervalues” the company and doesn't issue antitrust concerns.
Japan's Seven & i rejected a $39 billion takeover by Canada's Alimentation Couche-Tard, though the 7-Eleven chain operator remained open to another bid by the owner of the Circle K convenience store brand.
The Tokyo-based firm said that Alimentation Couche-Tard’s offer “grossly undervalues” the company and that the Canadian proposal doesn’t fully take into account the antitrust hurdles the deal would have to overcome.
Rejected Deal Would Have Been Biggest Japanese Takeover
"We are open to sincerely consider any proposal that is in the best interests of 7&i shareholders and other stakeholders; however, we will resist any proposal that deprives our shareholders of the company’s intrinsic value or that fails to specifically address very real regulatory concerns," Stephen Dacus, chairman of Seven & i's board, said in a statement.
The deal would have been the biggest takeover by a foreign company targeting a Japanese firm. A $22 billion takeover last year by drugmaker Merck & Co. (MRK) for rights to jointly develop and commercialize three of Daiichi Sankyo's candidate cancer drugs is currently the largest, according to data provider Dealogic.
Alimentation Couche-Tard trades over-the-counter in the U.S. using the symbol ANCTF. Seven & i's (SVNDY) U.S.-listed shares rose more than 1% in recent trading.
Do you have a news tip for Investopedia reporters? Please email us at
tips@investopedia.com
Article:
Proposed 7-Eleven buyout deal will likely face antitrust scrutiny, retail analyst says
By Dylan Butts
August 20, 2024
Circle K operator Alimentation Couche-Tard’s proposal to acquire Japanese rival and 7-Eleven owner Seven & i Holdings Co., is likely to attract antitrust scrutiny, particularly in the U.S., according to a retail analyst.
“I would imagine that there’s going to be some regulatory concern and some required divestment in order to make this [deal] work,” Bryan Gildenberg, managing director at Retail Cities, told CNBC’s “Street Signs Asia.”
Noting that 7-Eleven and Circle K are the two largest convenience store chains in the United States, Gildenberg said he expects the American Federal Trade Commission to have a “very strong point of view” on the potential merger, while Japanese regulators would also have concerns.
Seven & i Holdings said that it had received a preliminary takeover offer from Canada’s Couche-Tard on Monday. Couche-Tard, which confirmed it made a “friendly, non-binding proposal,” did not disclose how much it was willing to pay for the company.
If a deal were to go through, the combined company would represent 12.3% of the U.S. convenience store market, according to a Monday note from Canaccord Genuity Capital Markets. The next largest player in the space is Casey’s, with a 1.7% share, the note added.
Antitrust risks in the U.S. would be particularly stark in Florida and Texas, where the stores have a “fairly significant overlap,” Gildenberg said.
While Couche-Tard has about 16,700 stores globally, far fewer than Seven & i Holdings’ about 85,800, it commands a higher valuation of $57 billion as per market close on Monday compared with the Tokyo-listed company’s nearly $38 billion.
Seven & i shares jumped 23% in trading on Monday, while Couche-Tard lost over 2% on news of the proposed bid. Seven & i shares fell nearly 11% on Tuesday.
If the deal were completed, it would be the biggest-ever foreign takeover of a Japanese company and will possibly be followed by more acquisitions in the country, Gildenberg said.
“If you’re looking at international expansion, Japan’s the third largest market in the world and is one of the least penetrated, in some ways, by global companies,” he said, noting almost all of Japan’s top retailers are domestic names.
“The opportunity simply to just get access to that market at its size is significant.”
Couche-Tard also announced a deal to purchase U.S. company GetGo, which operates about 270 convenience retail and fueling locations across stateside.
According to Gildenberg, this shows that Couche-Tard is looking to strengthen its food services offerings — a strong suit of both GetGo and 7-Eleven.