The Japanese company behind one of the world’s most iconic convenience store chains is planning to spin off its North American holdings amid a takeover attempt from a major Canadian competitor.
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News about the initial public offering, which would include roughly 13,000 7-Eleven locations across the U.S., broke as the chain’s parent company, Seven & i Holdings, tapped Stephen Dacus as its new CEO, The New York Times reported.
Dacus will be the first executive to helm the company who was not born in Japan.
The shake-up comes as Canadian retail giant Alimentation Couche-Tard, which owns Circle K, is offering $47B for control of Seven & i. This is the largest foreign-led bid for a Japanese company in the nation’s history.
Seven & i has already agreed to sell its noncore assets to Bain Capital for nearly $5.5B, the Financial Times reported. That includes supermarkets, restaurants and specialty stores.
The firm also plans to buy back $13B worth of its shares by fiscal year 2030 to boost its valuation.
“We are now at a critical inflection point,” Dacus said at a press conference covered by the NYT.
He said he plans to pivot Seven & i from a “general retailer” to a “global convenience store champion” that will focus on bringing high-quality Japanese-style food to international markets, including the U.S.
In October, 7-Eleven announced plans to shutter 444 North American stores. At the time, Seven & i adjusted its earnings projection for its FY 2024 to $1.1B, a 44% drop.
The company attributed the change to “a tough consumer spending environment, particularly among lower-and middle-income earners,” in an October financial report.
Seven & i also pointed to “challenging employment conditions as well as inflationary pressures and high interest rates” for its North American woes.
Alimentation Couche-Tard’s takeover bid dates back to August. The Canadian company had a larger valuation than Seven & i at the time but a much smaller footprint. It had roughly 17,000 locations across North America and Europe, while the Japanese firm controlled 85,000 stores, mostly in the U.S. and Asia.
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