Canadian Company's Pending Takeover Of 7-Eleven Parent Is Dead

Night view of 7-Eleven store at 2546 Niagara Falls Boulevard, Tonawanda, New York
A 7-Eleven Store In Tonawanda, New York. Parent Company Seven & I Has Aggressively Expanded In The U.s.

Canadian retailer Alimentation Couche-Tard is dropping its multibillion-dollar bid to acquire Seven & i Holdings Co., the Japanese owner of the 7-Eleven convenience store chain.

Tumultuous discussions for the deal, valued at $47B, had been underway for about a year before they fell through, The New York Times reported.

In a letter to Seven & i’s board, Couche-Tard accused the company of a “calculated campaign of obfuscation and delay” throughout the negotiation process. The Canadian retailer also claimed that there hadn't been “sincere or constructive engagement” in discussions, according to the NYT.

Seven & i said in a statement to the NYT that it found the announcement “regrettable” but that it accepted the deal was off. Seven & i also took issue with the “numerous inaccurate statements” in Couche-Tard's letter.

Seven & i owns 85,000 stores, mainly in the U.S. and Asia. Couche-Tard operates just fewer than 17,000 locations across North America and Europe.

Stock for Seven & i fell by 9% Thursday morning, according to Seeking Alpha.

With the takeover scrapped, the future of a planned initial public offering for its North American 7-Elevens is in question. The 7-Eleven business is a very successful one for Seven & i.

Analysts told Bloomberg that with the IPO off the table, it would make more sense for the company to maintain its stake and keep its own value high than to sell at this juncture.

Seven & i also announced plans earlier this year to buy back $13B of its shares by fiscal year 2030 in a move to boost its valuation.

Couche-Tard's bid died at a challenging time financially for the company.

Couche-Tard’s stock slumped 14% this year as of the market close Wednesday. Investors have zeroed in on a slump in spending at Couche-Tard's U.S. stores, Bloomberg reported.

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