Japan’s Seven & i Holdings, the parent company of 7-Eleven, announced on Thursday that its founding Ito family was unable to secure the financing needed for a $58 billion management buyout.
As a result, the company is now evaluating other strategic options, including a rival bid from Canada’s Alimentation Couche-Tard (ACT).
Junro Ito, an executive at Seven & i and the son of its founder, led the buyout attempt with Ito-Kogyo, the family’s asset management company. Their bid was launched in November 2023 in response to an unsolicited takeover attempt by Couche-Tard, which initially offered $38 billion for Seven & i in August. After the company rejected that bid as undervaluing the business, Couche-Tard increased its offer to $47 billion.
Despite seeking financing from major Japanese banks and corporate partners, including Itochu Corp, the Ito family was ultimately unable to assemble the necessary funds. Itochu confirmed it had ended its consideration of participating in the buyout.
“There is no actionable proposal from Mr. Junro Ito and Ito-Kogyo for Seven & i to consider at this time,” the company stated. “Seven & i remains committed to exploring all opportunities to unlock value for shareholders and continues to assess a full range of strategic alternatives, including the proposal from Alimentation Couche-Tard.”
With the Ito family’s buyout attempt unsuccessful, the chances of Couche-Tard acquiring Seven & i have increased. If successful, the deal would mark one of the largest foreign takeovers of a Japanese company.
Couche-Tard, which operates nearly 17,000 convenience stores worldwide under the Couche-Tard and Circle K brands, has reaffirmed its interest in a potential deal. However, Seven & i has expressed concerns about regulatory approval in the United States, where both companies hold significant market share in the convenience store industry.
Following the announcement, Seven & i’s stock fell 12% in Tokyo, marking its steepest decline since the company’s listing as a holding entity in 2005. Meanwhile, Itochu’s shares surged nearly 7%, reflecting investor response to the outcome of the buyout discussions.
The competition for 7-Eleven, one of Japan’s most recognizable retail brands, underscores broader shifts in corporate governance and foreign investment in Japan. The country has historically been resistant to foreign takeovers, but recent economic reforms have encouraged companies to prioritize shareholder value, making firms like Seven & i more open to external bids.
Japan’s minister for economic revitalization, Ryosei Akazawa, previously stated that the government would assess the “economic security” aspects of any foreign acquisition of 7-Eleven, citing the vital role of convenience stores in disaster response and daily life.
With input from CNN, the New York Times, and Fortune.
