Sluggish Canadian quits purchasing from 7-Eleven's parent company
In a significant turn of events, Canadian retail giant Alimentation Couche-Tard has officially withdrawn its acquisition offer worth 6.8 billion yen (€40 billion) for Japanese retail giant Seven & i Holdings (7&i). The planned acquisition, which would have been the largest foreign takeover of a Japanese company, has now come to a halt.
The withdrawal follows a series of key issues that arose during the negotiation process. Allegedly, Seven & i Holdings failed to engage sincerely or constructively, with Couche-Tard claiming that the company did not provide necessary data for due diligence and limited interactions significantly. This, coupled with a calculated campaign of obfuscation and delay, hindered the progress of the deal.
Seven & i Holdings, in response, highlighted significant changes in the global economy, exchange rates, and financing markets as factors affecting the deal. Additionally, the company noted that any potential transaction would face substantial antitrust hurdles, which could have further complicated the process.
The Ito family, who are the major shareholders of Seven & i Holdings, have not been open to discussion regarding the acquisition offer. The initial approach by Alimentation Couche-Tard for Seven & i Holdings was nearly a year ago, but no further details about future acquisition attempts have been provided in the latest statement.
The withdrawal of the offer has resulted in a significant drop in Seven & i Holdings' stock. Initially, the fall in the stock undershot the Canadian offer by 22%. However, following the official withdrawal, the stock has fallen by an additional 9.2%, undershooting the Canadian offer by an increased amount.
It is important to note that an earlier buyout attempt by the founding family for Seven & i Holdings also failed due to financing issues. Alimentation Couche-Tard owns the Circle-K chain of convenience stores.
This development marks a significant setback for both companies, with Seven & i Holdings left to navigate the challenging retail landscape on its own and Couche-Tard potentially seeking new opportunities for growth. The retail industry continues to evolve, and only time will tell what the future holds for these two global giants.
Alimentation Couche-Tard's withdrawal of the acquisition offer, encountering issues such as lack of constructive engagement, data for due diligence, and calculated obfuscation from Seven & i Holdings, was preceded by an earlier buyout attempt by the founding family that also failed due to financing issues. Despite the setback, the retail industry's evolution may pose opportunities for growth for Couche-Tard, who owns the Circle-K chain of convenience stores, leaving Seven & i Holdings to navigate the challenging retail landscape alone.
