Shares of Seven & i jumped 23% in Tokyo, the largest single day jump for the stock in the company's history.
“This potential takeover bid is a huge deal. 7-Eleven is the biggest operator in the US convenience retail store space with a 14.5% share of the market in 2023," said Neil Saunders, managing director of GlobalData. "By comparison, Alimentation Couche-Tard’s banners had a 4.6% market share. So, combining the two would produce an entity that controls almost a fifth of the market.”
Marathon Petroleum Corp. announced in 2020 that its Speedway unit, based in Enon, would be acquired by the parent company of 7-Eleven for $21 billion in an all-cash transaction. The deal was closed in 2021.
7-Eleven has been in the process of integrating Speedway into its operations after it had closed on a deal that included the purchase of nearly 4,000 Speedway stores across 36 states.
In October 2021, the company announced it was laying off 35 people at Speedway’s Enon headquarters. And then in July 2022, 7-Eleven announced plans to layoff nearly 900 support staff and field operation employees in Texas and Ohio.
In March 2023, 900 people were working at the former Speedway headquarters at 500 Speedway Drive, which 7-Eleven renamed the Enon Store Support Center, according to a statement issued in February by 7-Eleven’s media office in response to questions from this newspaper.
A subsidiary of the Tokyo-based Seven & i Holdings Co., Ltd., 7-Eleven, which is headquartered in Dallas, owns, operates, and franchises approximately 9,000 convenience stores in the United States as of June, making it the largest U.S. convenience store chain at that time. Almost half of those stores sell fuel as well, according to the Federal Trade Commission.
The company has been trying to streamline operations and last year sold the department store chain Sogo & Seibu Co. to a U.S. investment fund.
Seven & i said that its board, as well as the special committee, have not made any decision yet as to accepting or rejecting the offer, to enter into talks with Couche-Tard or to pursue alternative options.
The company will make it's decision public, it said Monday.
Couche-Tard runs a number of convenience store chains under brand names like Couche-Tard, Circle K, and On the Run. It has more than 14,000 stores across Canada, Ireland, Mexico Russia, Poland, Norway, Sweden, Denmark and the United States.
Saunders said that any buyout attempt would get attention from U.S. regulators.
“Because convenience stores form a part of a much wider food and groceries market, there not all that many competition concerns,” Saunders said. “However, the levels of concentration will almost certainly attract FTC scrutiny which, given the current negative sentiment around consolidation and competition in the food and essentials space, will not make this deal an easy one.”