Couche-Tard continues aggressive bid to acquire 7-Eleven for $50 billion

In an effort to secure a significant acquisition, Canadian retailer Alimentation Couche-Tard has ramped up negotiations to acquire Japan's Seven & i Holdings, which operates the 7-Eleven convenience store chain. This bold move is marked by a recent non-binding proposal submitted on January 24, 2025, amounting to nearly $50 billion, a price based on a previously indicated $18.19 per share. Couche-Tard has been engaged in private discussions with key shareholders of Seven & i, emphasizing the potentials of the merger, which would unite their existing Circle K brand with 7-Eleven's extensive network of approximately 85,500 stores worldwide. Despite facing resistance from Seven & i, notably their concerns regarding U.S. antitrust regulations, Couche-Tard's founder, Alain Bouchard, has been on a publicity campaign to develop support for the takeover. Bouchard has proposed potentially enhancing the offer if Seven & i can disclose more financial information, indicating a willingness to explore options that could make the acquisition more appealing to shareholders. In the past few months, Seven & i has rejected several proposals from Couche-Tard, opting to maintain an independent operational strategy and introduce measures to counter the takeover bid. To bolster their negotiating position, Couche-Tard has offered to divest some stores to minimize antitrust issues while also highlighting their belief that Seven & i is undervalued compared to their actual worth. Even as negotiations continue, analysts suggest that Couche-Tard sees significant potential for value creation from the acquisition. Bouchard and his executive team have publicly stated their intent to work collaboratively rather than hostilely towards the buyout, despite ongoing tensions rooted in the prolonged negotiation process. The backdrop of the negotiations reflects broader stock market conditions and Seven & i's earlier management changes aimed at strengthening its position against Couche-Tard. Following the rejection of a management buyout plan, the pressure has intensified for Seven & i to reconsider its stance. Current market conditions show Seven & i shares trading more than 20% lower than Couche-Tard's proposed offer, suggesting investor confidence is wavering amid the uncertainty of the ongoing corporate tussle. The culmination of these efforts could lead to a transformative shift in the convenience retail sector, potentially reshaping market dynamics as these two brands move forward.