Canada’s ACT Offers $38 Billion to Acquire Japan’s 7-Eleven

Alimentation Couche-Tard (ACT), a Canadian convenience store giant has made a bid worth $38 billion for the Japanese-owned 7-Eleven, which has a substantial presence in the Asian and North American markets.

If the deal is through, it would be Japan’s record foreign takeover. Owned by Circle K, ACT made the approach for the chain on Monday. ACT’s footprint in the US and Canada would more than double to more than 20,000 sites once the deal is completed.

The offer of $38 billion valued 7-Eleven at a fifth more than its pre-bid price on the Japanese stock market, a report from BBC said.

Quoting ACT, the BBC report said that it has submitted a friendly, non-binding proposal to buy the retail chain but that there was no guarantee it would go ahead. The company is focused on reaching a mutually agreeable transaction that benefits both companies’ customers, employees, franchisees and shareholders, ACT said.

Meanwhile, Tokyo-based Seven & i Holdings, which owns 7-Eleven, said that it has formed a special committee to consider the offer. “The special committee intends to conduct a prompt, careful and comprehensive review of the proposal,” Seven & I Holdings said.

The company said that it had received a confidential, non-binding and preliminary proposal by ACT to acquire all of its outstanding shares.

The Company has confirmed that that it has received a confidential, non-binding and preliminary proposal by ACT to acquire all outstanding shares of the company. The Board of Directors of the company has formed a Special Committee of the Board of Directors, comprised solely of independent outside directors, led by Stephen Hayes Dacus, as Chairperson of the Board of Directors, to review the proposal.

“Consistent with its obligation to act in the best interest of its shareholders and other stakeholders of the company, the Special Committee intends to conduct a prompt, careful and comprehensive review of the proposal, the company’s stand-alone plans and other alternatives for enhancing corporate value, after which a response will be made to ACT,” 7-Eleven said.

Challenges Many

If a deal is agreed, it could face challenges from competition watchdogs in North America. The 7-Eleven chain runs more than 13,000 stores in the US and Canada, while ACT has more than 9,000.

In recent years, activist investors have pressed Seven & i to sell some of its assets to focus the company on the 7-Eleven brand.

The takeover offer also comes after the Japanese stock market had a record slump and then a record spike following the central bank’s decision to raise borrowing costs, the BBC report said.

7-Eleven was first brought to Japan from the US in 1974 by retail tycoon Masatoshi Ito, who died in last year at the age of 98, is credited with turning the convenience store chain into a global business empire.

Today, 7-Eleven has 85,000 shops worldwide in 20 countries and territories and has a large footprint in Asia.

Quebec-based ACT is listed on the Toronto Stock Exchange and runs around 17,000 shops in more than 30 countries and territories across North America, Europe and Asia under the Circle K and Couche-Tard brands. It has a stock market valuation of about $58.2 billion.