Founding Family of 7-Eleven Fails in Effort to Prevent Foreign Acquisition

The family that started 7-Eleven’s parent company in Japan has not been able to gather enough money to buy the company themselves. This announcement came on a Thursday, just a few months after they attempted to buy it for over $50 billion in an effort to stop a foreign takeover.

Seven & i Holdings is a major company overseeing around 85,000 convenience stores, mostly in Asia and the United States. In a recent statement, they mentioned that they would explore other options, including a buyout proposal from a Canadian company called Alimentation Couche-Tard, which the founding family had previously turned down.

Junro Ito, who is an executive at Seven & i and the son of the founder, along with a family-owned asset management firm called Ito-Kogyo, started their buyout effort in November after Couche-Tard made an unsolicited offer to take over the company.

Couche-Tard operates more than 16,000 stores under the Couche-Tard and Circle K brands in North America and Europe. In August, they initially offered $38 billion for Seven & i, but this offer was rejected in September on the grounds that it did not reflect the company’s true value. Couche-Tard came back with a higher offer of $47 billion in the following month.

If Couche-Tard manages to succeed in its takeover, it would be a significant event as it would likely be the largest acquisition of a Japanese company by a foreign firm. However, on the Thursday following the news that the Ito family couldn’t finance their buyout, shares of Seven & i dropped by 11%.

The situation involving 7-Eleven highlights the ongoing shifts in corporate Japan because the convenience store is seen as a national asset, making any foreign acquisition attempts challenging. Japan is often viewed as a tough market for foreign companies looking to make mergers or acquisitions. There are ongoing doubts among analysts regarding whether Couche-Tard would manage 7-Eleven better than the current management at Seven & i.

For over a decade, Japanese officials have encouraged local companies to be more receptive to takeover offers to show that they are open to options that could benefit their shareholders financially. This push aims to move away from the old mindset of protective firms that could easily dismiss foreign takeover attempts without much thought.

Seven & i has expressed concerns that Couche-Tard’s buyout could trigger investigations into competition in the United States, where both companies are major players in the convenience store market.

In their recent statement, Seven & i also indicated that they were collaborating with Couche-Tard to see if a revised proposal that might address possible regulatory hurdles could be developed.