Couche-Tard, the Canadian owner of Circle-K convenience stores, expressed confidence in overcoming U.S. regulatory obstacles in its proposed $47 billion acquisition of Japanese retail giant Seven & i Holdings, owner of 7-Eleven. Despite facing a cool reception and “limited engagement” from Seven & i, Couche-Tard remains committed to pursuing the deal.
This potential acquisition, which would be the largest foreign buyout in Japan’s history, has been met with resistance from Seven & i’s newly appointed CEO, Stephen Dacus, citing significant regulatory challenges. The primary concern stems from the combined market dominance of the two companies in the U.S. convenience store sector, boasting approximately 20,000 locations.
Addressing these concerns, Couche-Tard stated it has identified a portfolio of U.S. stores for potential divestiture and has initiated discussions with prospective buyers, including both strategic acquirers and private equity firms. This proactive approach aims to alleviate antitrust concerns and pave the way for regulatory approval. Couche-Tard believes this divestiture plan demonstrates a “clear path” to securing the deal. Furthermore, the Canadian company expressed frustration with Seven & i’s reluctance to engage more constructively in the process.
Couche-Tard’s assertive stance contradicts Dacus’s claims of insurmountable regulatory hurdles. The Canadian company contends that it has been “friendly and persistent” in its pursuit of the acquisition, despite facing “significant frustration and distraction.” Couche-Tard emphasized its commitment to finding a solution acceptable to U.S. regulators.
In a December proposal to Seven & i, Couche-Tard outlined specific commitments to address regulatory requirements, including the number of stores to be divested and a substantial termination fee. Sources indicate that Couche-Tard needed to establish a concrete divestiture plan, outlining specific stores, timelines, and credible buyers, before engaging in more detailed confidential discussions with Seven & i. Seven & i has not yet publicly responded to Couche-Tard’s latest statements. The future of this landmark deal remains uncertain, hinging on regulatory approval and the willingness of both parties to find common ground. Couche-Tard’s proactive approach to addressing regulatory concerns signals its strong determination to see the acquisition through.
