Couche-Tard withdraws $46 billion bid for Seven & i, citing lack of cooperation

Canada’s Alimentation Couche-Tard (ACT) has officially pulled its $46 billion bid to acquire Japan’s Seven & i Holdings, the operator of 7-Eleven, citing a “lack of constructive engagement” during a year of negotiations. The withdrawal marks the end of what would have been the largest foreign takeover in Japan’s corporate history. In a scathing letter to Seven & i’s board, Couche-Tard accused the Japanese company of obstructing the due diligence process, describing the meetings as tightly scripted and accusing Seven & i of delaying tactics.

“There has been no sincere or constructive engagement from Seven & i that would facilitate the advancement of any proposal,” Couche-Tard stated, adding that the Japanese retailer's actions had been detrimental to its own shareholders. The Canadian convenience store operator also complained that its critical questions remained unanswered and that the information shared by Seven & i was minimal and largely public.

Seven & I reject mischaracterizations

In response, Seven & i expressed disappointment over Couche-Tard’s decision but denied the accusations. “While we are disappointed by ACT’s decision, we disagree with their numerous mischaracterizations,” the company said. Seven & i emphasised that it had engaged in good faith and was focused on maximising shareholder value through its own restructuring efforts, which include a $5.4 billion sale of its supermarket business and a ¥2 trillion ($13.24 billion) share buyback plan.

Shares of Seven & i fell over 9 per cent following Couche-Tard's announcement, reflecting the market’s disappointment with the failed deal. Analysts suggested that the failure of the deal highlighted the persistent barriers to foreign takeovers in Japan, a country where corporate governance practices are often seen as protectionist.

Future prospects for Seven & i

Couche-Tard had initially made a $39 billion offer in August 2024, later raising it to $46 billion in an attempt to acquire Seven & i and create one of the world’s largest retail groups by store count. However, the two companies failed to agree on a deal structure, with Couche-Tard proposing to acquire Seven & i’s international businesses, leaving the Japanese operations partially under the control of the latter.

With the bid now abandoned, Seven & i faces the challenge of demonstrating that its standalone strategy can deliver more value than the rejected acquisition offer. Its upcoming August strategy update will be critical in convincing investors of its ability to move forward successfully without the proposed merger.

(With inputs from agencies)