7-Eleven Parent Plans To Shed North American Business, Fend Off Canadian Takeover

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.

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.