7-Eleven Parent Company Has a New Plan to Ward off Couche-Tard’s Takeover
As the takeover bid from Couche-Tard heats up, Seven & i Holdings announced a plan to split its business in two.
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Splitting up is never a good idea in horror movies, but it might help you sidestep a takeover attempt.
As the long-gestating takeover bid from Couche-Tard heats up, the Tokyo-based Seven & i Holdings — a.k.a. the parent company of 7-Eleven — announced a plan to split its business in two. One half will be centered on the iconic convenience stores and gas stations, while the other half will include 31 other retail operations, from Tower Records Japan to Seven Bank.
7-Eleven and the Other 31
Historically speaking, foreign companies have had a tough time completing acquisitions of Japanese firms. But the Canada-based Couche-Tard, which owns Circle K, is trying anyway. Back in September, Seven & i announced it had turned down a roughly $38 billion buyout offer from the convenience store competitor, an acquisition that would’ve marked the largest-ever foreign buyout for a Japanese company.
And balking at the offer had its rewards. On Wednesday, Bloomberg reported that Couche-Tard had upped its bid by 20%, to around $47 billion. Again, Seven & i is saying no, and opting for a far more radical alternative.
The core convenience store business will be aptly renamed 7-Eleven Corp., and it will maintain a minority stake in the collection of other ventures, now dubbed York Holdings. York’s portfolio will include assets such as baby goods store Akachan Honpo, the operating company of Denny’s Japanese locations, and the general goods store Loft. The plan is to list York publicly sometime after February 2026, the company said.
The goal of the splintering is twofold: to ward off Couche-Tard’s takeover and to revive a core convenience store business beset by slagging growth:
- Weaker convenience store sales have forced Seven & i to cut its operating profit outlook for the 12 months through the end of February from ¥545 billion ($3.6 billion) to ¥403 billion ($2.7 billion).
- “We are going to speed up our transformation,” CEO Ryuichi Isaka said Thursday. “This plan is designed to bring out our strengths and achieve greater growth.”
Still, not everyone is buying it. “There wasn’t a story strong enough to convince investors that the company can improve deteriorating performance,” Ikuo Mitsui, fund manager at Aizawa Securities, told Bloomberg.
Last-Ditch Effort: This is just Seven & i’s latest attempt to keep Couche-Tard at bay. In August, the company filed with the Japanese government to be redesignated as a “core” business essential to national security, and, in September, the government approved its request — theoretically raising barriers to a foreign takeover. However, just days later, Japan’s own finance minister pushed back at the idea, saying that any foreign takeover of a Japanese company would require government approval anyway. So much for convenience.