Alimentation Couche-Tard expressed confidence in overcoming U.S. regulatory challenges for its proposed $47 billion acquisition of Japan’s Seven & i, despite frustrations over limited engagement from the Japanese firm. Couche-Tard, owner of Circle-K, has been persistent in pursuing the deal, stating that they have identified potential U.S. store divestitures to facilitate regulatory approval. While Couche-Tard believes a clear path exists for a merger, Seven & i’s new CEO, Stephen Dacus, emphasized significant hurdles. The companies, key players in the U.S. convenience-store market, are actively seeking interested buyers for the identified divestiture package.
By Anton Bridge and Abigail Summerville
TOKYO (Reuters) – On Tuesday, Canada’s Alimentation Couche-Tard expressed optimism about navigating U.S. regulatory challenges in its planned $47 billion acquisition of Japan’s Seven & i, while voicing frustration over the 7-Eleven owner’s “limited engagement.”
The owner of Circle-K has been pursuing Seven & i for several months, encountering cold reactions from the Japanese retail behemoth.
“We have consistently stated our intention to be both amicable and persistent in pursuing this transaction,” Couche-Tard declared in a statement, countering the Japanese company’s claim that significant regulatory obstacles impede the potentially transformative deal.
“We have maintained this approach despite considerable frustration and interruptions,” it continued.
In one of its most detailed public statements to date, Couche-Tard noted it had been collaborating with Seven & i on a strategy to divest certain U.S. stores if the acquisition proceeds.
These comments mark the latest development in what could become Japan’s largest-ever foreign buyout, contradicting the newly appointed CEO of Seven & i, Stephen Dacus, who maintains that significant regulatory barriers stand in the way of a merger.
The two companies are leaders in the U.S. convenience-store sector, operating approximately 20,000 locations between them.
“We firmly believe that a clear path for regulatory approval exists in the U.S.,” Couche-Tard commented, adding that they remain “disappointed by the very limited engagement.”
Seven & i has yet to respond to a request for comment.
Couche-Tard, which runs the Circle-K convenience store chain, revealed it had pinpointed a selection of U.S. stores for potential divestment and had initiated discussions with interested buyers at the suggestion of Seven & i.
In recent weeks, both Seven & i and Couche-Tard have contacted potential buyers, comprising strategic investors and private equity firms, to assess interest in the divestiture package, according to a source familiar with Seven & i’s discussions.
Couche-Tard is required to establish a clear divestiture strategy that outlines specific stores, timelines, and credible buyers before it considers disclosing confidential information to its competitor, the source mentioned.
Last December, the Canadian suitor presented a proposal to the Japanese firm detailing the commitments it was prepared to undertake to gain U.S. regulatory approval. This included the number of stores it was willing to divest and a substantial termination fee.