Japan's Economy Minister weighed in on Quebec-based Couche-Tard's efforts to buy 7-Eleven's owner, saying the sale could raise national-security concerns.Kim Kyung Hoon/Reuters
Japan’s Economy Minister says interest by a foreign buyer such as Alimentation Couche-Tard Inc. in taking over one of the country’s retail champions, Seven & i Holdings Co., raises national-security concerns.
“Speaking about a potential acquisition of Seven & i, I think the matter is heavily related to [national] security,” Ryosei Akazawa said at the Japan National Press Club Wednesday.
The minister evoked the wide role that Seven & i, owner of the 7-Eleven convenience store chain, plays in Japanese society. He said the stores and their distribution networks could be used in the event of disasters to help bring hot food to people in affected regions, for example.
“If Seven & i’s convenience store business is in foreign hands and run solely for profits, we’ll have to think about various things, such as whether we can we get full support when our people affected by the disaster are suffering,” he said.
The comments are the first by a senior Japanese government official touching on security issues raised by Couche-Tard’s bid for Seven & i. And if they signal a government cool to a foreign takeover, they could further complicate the Laval, Que., company’s efforts to cement a friendly deal.
Couche-Tard has increased its initial proposal for Seven & i and is now offering about US$47-billion to acquire the company and its global network of 7-Eleven stores. It sees a merger as a way to improve its fresh food offering and become a stronger retailer in what remains a fragmented industry.
Seven’s founding Ito family, which holds a roughly 8-per-cent stake in the Japanese retailer, appears unwilling to sell, however. It is now seeking to counter Couche-Tard’s approach with a management buyout proposal that Bloomberg reports is worth around 9-trillion yen (US$58.7-billion).
A special committee of Seven & i directors is reviewing the options, including Couche-Tard’s offer as well as the non-binding and confidential proposal received from Junro Ito, a Seven & i vice-president and director. Mr. Ito’s father, the late Masatoshi Ito, built the retail empire that owns 7-Eleven.
Couche-Tard executives have vowed to pursue their Japanese rival for as long as it takes. Company officials did not immediately respond to a request for comment Wednesday.
Last October, Couche-Tard founder Alain Bouchard travelled to Tokyo with a small leadership team in a bid to forge relationships and build some comfort around the idea that they have deep respect for the Japanese company and have no intention of destroying its culture. They’ve also noted that their own Circle-K convenience store network has significant experience providing supplies and leading fundraising efforts for people affected by storms and other emergency events.
Seven & i controls the 7-Eleven chain’s 85,000 stores around the world as well as a series of other assets including a bank, life insurance units and credit card businesses. The approach by Couche-Tard is seen as a test of whether Japan is ready for big cross-border mergers, or whether the country will slip back into the protectionist tendencies that have characterized its corporate and political classes over time.
This isn’t the first time Couche-Tard faces concerns about national security in one of its takeover attempts. The company tried to buy French grocer Carrefour SA in 2021, but was rebuffed by the French government, which quashed the deal on the grounds that it would harm the security of the country’s food supply.
“We didn’t think, and Carrefour didn’t think, [food security] could be at risk,” Mr. Bouchard said at the time. “I mean they’re a retailer. We’re buying food from the locals.”
Japan’s government in September added Seven & i to its list of companies regarded as crucial to national security, raising questions about whether it would block a takeover. The Finance Ministry said at the time that the classification would not create hurdles to a potential buyout.
With reports from Reuters