Circle K Owner Eyes Global Retail Giant with Bold Bid for 7-Eleven Parent Company. A Couche Tard convenience store in Montreal.


August 20, 2024 Tags:

A leading Canadian convenience store chain might soon grow even larger as the owner of Circle K, Alimentation Couche-Tard Inc., has made a bid to acquire one of the biggest players in the sector. The Laval, Quebec-based company has offered to purchase all outstanding shares of Japan’s Seven & i Holdings Co. Ltd., the owner of 7-Eleven, aiming to create a global retail powerhouse.

Seven & i Holdings confirmed it received the offer, describing it as "friendly" and "non-binding." Couche-Tard, while not disclosing specific terms, expressed its intent to reach a mutually beneficial agreement that would serve the interests of both companies' customers, employees, franchisees, and shareholders.

Neil Saunders, managing director of GlobalData, emphasized the significance of this potential deal, calling it a "huge" move. Couche-Tard already operates in 31 countries with over 16,700 stores under the Couche-Tard, Circle K, and Ingo brands. On the other hand, Seven & i runs about 85,800 stores, employing over 157,000 people and attracting 63.6 million customer visits daily.

Beyond its well-known 7-Eleven stores, Seven & i owns a diverse range of businesses, including supermarkets, food producers, and financial services. In the U.S., 7-Eleven holds a 14.5 percent market share in the convenience retail space, while Couche-Tard’s banners account for 4.6 percent. Saunders noted that a merger would create a company controlling nearly a fifth of the U.S. market.

Despite the publicized offer, Couche-Tard cautioned that there is no certainty an agreement will be reached. Seven & i has formed a special committee to review the proposal, and Couche-Tard has stated it will not make further public comments until a deal is finalized.

Irene Nattel, an analyst with RBC Capital Markets, pointed out that it's unclear which of Seven & i's assets Couche-Tard would keep if the acquisition goes through, but she highlighted 7-Eleven as the "crown jewel." Nattel also noted potential regulatory challenges, especially in Japan and the U.S., where such large transactions are under close scrutiny.

Saunders agreed, suggesting that while competition concerns might be minimal given the broader food and grocery market, the deal would likely attract attention from the Federal Trade Commission due to the significant market consolidation.

Couche-Tard has faced similar hurdles before. In 2021, its attempt to acquire French grocer Carrefour SA was blocked by the French government over food security concerns. The proposed deal with Seven & i is even larger and could transform Couche-Tard into a dominant global player, though Saunders cautioned that whether the benefits outweigh the costs remains to be seen.

Separately, Couche-Tard announced a deal to acquire GetGo Café + Markets from Giant Eagle Inc., further expanding its footprint in the U.S.

How useful was this post?

Click on a star to rate it!

Average rating 0 / 5. Vote count: 0

No votes so far! Be the first to rate this post.

You may also like

Mortgage Rates Ease as Banks Cut Prime Rates to 5.45%

The Bank of Canada reduced its interest rate by 50 basis points on Wednesday, bringing it down to 3.25%. The....

Annual Rents Hit 15-Month Low, Still Higher Than 3 Years Ago

In November, the average asking rent across Canada fell to its lowest point in 15 months, reaching $2,139. This marks....

How the Holiday GST Relief Will Benefit Consumers

The federal government’s GST relief will begin this Saturday, providing some financial relief just before the busy holiday shopping period.....

Ottawa To Invest $1b+ In Expanding N.B.'s Clean Power Grid

DIEPPE, N.B. – The federal government has announced plans to invest over $1 billion to expand New Brunswick's clean energy....

Political Chaos In France, Germany Slows Europe’s Economic Aid

Europe’s economy, already struggling with slow growth and competitiveness against the U.S. and China, now faces new obstacles as political....

Canada’s 6.8% Jobless Rate Fuels Hopes For A 50-Point Rate Cut

In November, Canada recorded 1.5 million unemployed individuals, pushing the jobless rate to 6.8%, a level not seen since January....

Saskatchewan Passes Bills on Tax Relief and Carbon Levy Exemption

Regina – Premier Scott Moe's government made good on its fall election promises by passing two significant bills Thursday aimed....

Eli Lilly To Invest $3b In Wisconsin Plant Expansion For Demand

Eli Lilly plans to invest an additional $3 billion to expand its manufacturing capacity, aiming to keep up with rising....

Transport Minister Calls Out Air Canada Over New Carry-On Bag Fees

Transport Minister Anita Anand plans to meet with Canadian airline executives in mid-December following Air Canada’s decision to introduce carry-on....

Meta Plans $10b AI Hub In Louisiana; Musk Expands In Tennessee

NEW ORLEANS (AP) — Meta, the parent company of Facebook, has announced plans to build its largest artificial intelligence data....

Ontario Hit Hard By Soaring Beef Prices: Farmers And Consumers

Shoppers may be in for a surprise when they see the rising cost of beef at the grocery store. "The....

Trump To Block Japanese - US Steel Deal, Promises Tariffs, Tax Break

President-elect Donald Trump has reaffirmed his opposition to the proposed acquisition of U.S. Steel by Japanese steelmaker Nippon Steel Corp.,....