Image Credits : The Globe and Mail
Alimentation Couche-Tard’s bid to acquire Japan’s Seven & Holdings has hit a new roadblock as the yen’s rapid appreciation in recent weeks adds financial strain to the Canadian retailer’s proposal. Couche-Tard, one of the world’s largest convenience store operators, seeks to expand its international presence by acquiring the operator of the iconic 7-Eleven chain. However, rising currency costs and valuation disagreements are casting doubts on the deal.
The appreciation of the yen has made the acquisition significantly pricier for Couche-Tard, which will have to pay more to convert its Canadian dollars into Japanese yen. This has complicated negotiations with Seven & i, which already views the current offer as undervalued. The Japanese firm has reportedly labeled the bid as “low” and plans to formally request a reassessment of the proposal. Seven & i, with a market capitalization of approximately $39 billion, is a major player in Japan’s retail landscape, operating more than 85,000 7-Eleven stores globally.
In addition to the currency challenge, the deal is facing regulatory scrutiny. Seven & i has petitioned the Japanese government to designate parts of its business as “core” infrastructure, potentially blocking the acquisition on national security grounds. Japan’s strict regulations on foreign takeovers, especially in key sectors, could further complicate the process.
Couche-Tard has a history of grappling with regulatory hurdles, most notably abandoning a $25 billion bid for French grocer Carrefour in 2021 due to government opposition. Analysts note that the acquisition would make Couche-Tard one of the largest convenience store operators globally, giving it a strong foothold in Asia and enhancing its economies of scale at a time when competition in the sector is fierce.