ACT Drops Pursuit of Seven & i

Alimentation Couche-Tard (Laval. Que.) said it is dropping its year-long effort to acquire Seven & i Holdings Co. Ltd. (Tokyo) The Canadian c-store operator unveiled that move in a news release that mainly consisted of a long letter its board sent to its counterpart at Seven & i Holdings.

In that missive, ACT said it was withdrawing it $47 billion offer for the operator of 7-Eleven c-stores due to “a persistent lack of good faith engagement.”

“You have engaged in a calculated campaign of obfuscation and delay, to the great detriment of 7&i and its shareholders,” the letter said. “We believe this approach reinforces our concerns about your approach to governance.”

The letter also noted that Seven & I executives have been “very clear about your concerns regarding the U.S. regulatory process. In our initial proposal on July 25, 2024, and thereafter, we have acknowledged that regulatory approvals would be needed across several jurisdictions. We continue to believe that there is a clear path to U.S. regulatory approval.”

Two hours after ACT released that letter, Seven & i put out a statement of its own, which said, “While we are disappointed by ACT’s decision, and disagree with their numerous mischaracterizations, we are not surprised. Since ACT initially made its proposal, there have been significant changes in the global economy, exchange rates, and financing markets. As ACT noted on its most recent earnings call, conditions in key markets have deteriorated since last year.

“The Special Committee [created to consider the ACT proposal] consistently engaged in good faith and constructively with ACT to explore the possibility of reaching a deal that could be consummated and that would benefit our shareholders. At the same time, we were always honest about the extraordinary antitrust hurdles a potential transaction would face, including the protracted timeframe to move through the regulatory process.”

The company also said it was working to proceed with its previously announced standalone value-creation plan, which it has been pursing in parallel with the ACT talks. That effort involves selling its Superstore Business and taking its North American convenience-store business public via a stock offering.

Alimentation Couche-Tard has more than 16,700 stores in 29 countries and territories operating under the Circle K and Couche-Tard banners, while Seven & i’s 7-Eleven chain has 85,000-plus stores in Japan, the U.S. and Europe.