How Couche-Tard became Canadian retail giant now going after 7-Eleven

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The Japanese owner of convenience store giant 7-Eleven Inc. says it has received a potential takeover bid from Alimentation Couche-Tard Inc.

The Laval, Que.-headquartered operator of stores such as Couche-Tard and Circle K made a friendly, non-binding offer to acquire much larger rival Seven & i Holdings Co. Ltd. in a deal valued at around US$31 billion.

If the merger took place, it would mark the largest foreign takeover of a Japanese company and make Couche-Tard, valued at US$58.5 billion, one of the world’s biggest convenience store operators, with more than 100,000 stores across the globe.

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“The company is focused on reaching a mutually agreeable transaction that benefits both companies’ customers, employees, franchisees and shareholders,” Couche-Tard said in a press release confirming the proposal. “There can be no certainty at this stage that any agreement or transaction will be reached.”

Seven & i said that a special committee of independent outside directors will “conduct a prompt, careful and comprehensive review of the proposal.”

Here’s what you need to know about Couche-Tard and what a potential merger would mean.

How Couche-Tard got here

Couche-Tard began in 1980 with a single convenience store in Laval before growing to operate more than 16,000 stores around the world.

In 1987, the company acquired Métro-Richelieu Inc.’s 72 Sept-Jours stores, followed by 60 Mac’s/La Maisonnée de Silcorp Ltd. stores in 1993 (in 2015, most of the Mac’s stores were rebranded to Circle K).

Later, Couche-Tard took over Perette and then expanded outside Quebec by buying C-Corp Inc., a subsidiary of grocery retailer Provigo Inc., which operated 245 Provi-Soir stores in Quebec and about 50 Winks stores in Ontario and Alberta.

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One thousand stores is nothing for me

Couche-Tard founder Alain Bouchard

In 1999, Couche-Tard announced a friendly takeover of Toronto-based Silcorp Ltd., making it Canada’s leading convenience store operator. In the following years, it added the 30-store chain Tabatout, the Dunkin’ Donuts franchise in Quebec and 13 Pétro-T fuel stores to the fold.

Couche-Tard didn’t stop there, becoming the principal owner of Scandinavian convenience and fuel retailer Statoil Fuel & Retail ASA (later selling all its shares in 2017). It also acquired Minnesota-based Holiday Stationstores, Inc., known for its fresh sandwiches and breakfast options, in 2017 in a move to improve its own food offerings.

It even briefly entered the cannabis game with its stake in Fire & Flower Holdings Corp., but experienced millions in losses in fiscal 2024 when the cannabis company went belly-up. Couche-Tard signed a deal to co-locate 10 Green Thumb Industries Inc. Rise Express cannabis dispensaries next to Circle K stores in Florida, but it’s still waiting on government approval.

On Monday, Couche-Tard also said it had reached a definitive agreement to acquire GetGo Café + Markets from supermarket retailer Giant Eagle Inc. in a deal expected to close sometime in 2025.

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“One thousand stores is nothing for me,” Couche-Tard founder Alain Bouchard said in an interview with Canadian Grocer back in 2014. “We want to have a foot in Asia with our own money.”

Making a bid for 7-Eleven

After Couche-Tard’s talks for a multi-billion-euro takeover of French supermarket chain Carrefour Group SA fell through due to food security concerns, the Canadian company in January announced it had completed its acquisition of certain European retail assets from French oil giant TotalEnergies SE.

Couche-Tard has now set its sights on its next foreign acquisition in Japan’s Seven & i.

News of the proposal sent Seven & i shares skyrocketing by about 23 per cent in Tokyo, valuing the company at around 5.6 trillion yen (about $52.2 billion). Couche-Tard shares dropped two per cent in mid-day trading on Monday.

“This potential takeover bid is a huge deal. 7-Eleven is the biggest operator in the U.S. convenience retail store space with a 14.5 per cent share of the market in 2023,” Neil Saunders, managing director of GlobalData, told ABC News. “By comparison, Alimentation Couche-Tard’s banners had a 4.6 per cent market share. So, combining the two would produce an entity that controls almost a fifth of the market.”

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Questions about the deal

However, analysts seem skeptical that an acquisition will occur. Nikkei Asia said Couche-Tard previously approached Seven & i about acquiring the company in 2020.

“I strongly doubt that this takeover proposal will come to fruition, especially considering Seven & i’s resistance to divesting even their legacy businesses,” Oshadhi Kumarasiri, a LightStream Research Inc. analyst who covers Seven & i, told Reuters.

“Unless the offer comes with a substantial premium over Seven & i’s recent highs, it seems improbable that the management would even consider this idea.”

• Email: slouis@postmedia.com

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