The convenience store giant behind Circle K is not giving up its hope of taking over the Japanese owner of its international rival 7-Eleven.
Seven & i Holdings Co. said: Ltd. said in a statement on Wednesday that it had received a revised, confidential, private and non-binding offer from Alimentation Couche-Tard.
The Laval, Que.-based company, which also owns stores under the Couche-Tard and Ingo brands, did not immediately respond to a request seeking confirmation of the proposal or details about its value.
Bloomberg and Reuters reported that the value of Seven&i’s new offer is US$47 billion, about 22 percent higher than the US$38.6 billion offer made by Couche-Tard in August.
The Japanese company rejected the previous offer, saying it “significantly undervalues” the potential of its convenience store business, while not fully addressing US regulatory concerns.
The rejection “disappointed” Couche-Tard, which said in September that it remained focused on reaching an agreement.
The company said its proposal offers clear strategic and financial benefits, and said it believes the two companies can reach a deal acceptable to both parties.
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For Couche-Tard, there are many benefits to having Seven & i.
Couche-Tard operates in 31 countries and has more than 16,800 stores. A successful deal with Seven & i could add 85,800 stores to its network.
Seven & i owns not only the 7-Eleven chain, but also supermarkets, food producers, household goods retailers and financial services companies.
Getting Seven & i won’t be easy, even for a giant like Couche-Tard. Concerns of competition and dominance are widespread in many global markets, and analysts say that obtaining regulatory approvals may not be difficult.
“The concentration levels will almost certainly attract FTC scrutiny, which, given the current negative sentiment around mergers and competition in the food and basics space, will not make this an easy deal,” said Neil Saunders, managing director of GlobalData. in an email, when news of Couche-Tard’s offer first broke.
Japanese emotes also add “complexity” to the show.
“Although there are reforms in the country to facilitate takeovers, most Japanese companies are very cautious and resistant to change. This includes Seven&i, whose complex operating model also hinders the deal.”
Last month, Couche-Tard’s battle to buy Seven&i became tougher when the Japanese company was designated as an “essential” national security company.
If the deal ends up being scuttled, it wouldn’t be the first time Couche-Tard has had to back away from its bold ambitions.
The company tried to buy French grocery company Carrefour three years ago, but was forced to abandon takeover talks when French Finance Minister Bruno Le Maire said he would not allow a potential $25 billion deal to go ahead because it would put food security at risk.
The two companies agreed to instead consider future operational partnerships
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