Seven & i & Couche-Tard Set Deadline for Interested Buyers of U.S. Stores
TOKYO & LAVAL, Quebec — Seven & i Holdings Co. Ltd. and Alimentation Couche-Tard Inc. are giving potential buyers of their U.S. convenience stores until the end of March to express their interests and address antitrust concerns.
Some potential buyers are already in talks with the companies and have signed nondisclosure agreements, according to Bloomberg, citing sources familiar with the matter.
Interested buyers will need to demonstrate a plan to address regulatory hurdles in the United States. This has been a top concern for Seven & i, parent company to 7-Eleven Inc., which recently pointed to the failed merger of Albertsons and Kroger grocery stores as a warning for retailers looking to divest thousands of locations without a market-tested buyer that is well-positioned to preserve the competitive landscape.
"As responsible stewards of our shareholders' capital, we will not blindly enter a transaction with no clear path to closing that could leave our company in a value destructive limbo for multiple years," Seven & i wrote in a publicly released letter to shareholders.
Together, the companies have approximately 20,000 c-stores in the United States. Seven & i estimated that more than 2,000 stores could be divested in the event of a merger, while Couche-Tard has not provided a divestiture target.
Couche-Tard has emphasized its respect for Seven & i as a business while criticizing its plans, stating that its acquisition proposal provides clear economic value in contrast with Seven & i's "repeatedly revised" path forward.
"[Seven & i's] new multiyear plan relies on a future U.S. IPO [initial public offering], a long-dated capital return plan, and a turnaround in performance of its convenience stores — all of which come with material uncertainty with respect to delivering value to shareholders," Couche-Tard wrote in a letter to its shareholders.
Couche-Tard reportedly offered $47 billion to acquire Seven &i, but recently noted that it could enhance its offer if Seven & i increases its cooperation and reveals more financial information.
Seven & i subsidiary 7-Eleven Inc. operates, franchises and/or licenses more than 13,000 stores in the United States and Canada. In addition to 7-Eleven stores, it operates and franchises Speedway, Stripes, Laredo Taco Co., and Raise the Roost Chicken and Biscuits locations.
Laval-based Alimentation Couche-Tard operates in 31 countries and territories, with more than 16,800 stores, of which approximately 13,000 offer road transportation fuel. With its well-known Couche-Tard and Circle K banners, it is one of the largest independent convenience store operators in the United States and it is a leader in the convenience store industry and road transportation fuel retail in Canada, Scandinavia, the Baltics, Belgium, as well as in Ireland.
