In a recent update to the finance ministry’s list, Seven & i Holdings, the owner of 7-Eleven convenience stores, has been designated as “core” to national security. This classification has sparked questions about whether it is a strategic move to defend against the recent $38.5 billion buyout offer from Canada’s Alimentation Couche-Tard.
The new status does not necessarily pose additional hurdles to a potential takeover by Couche-Tard. However, it does highlight the Japanese government’s scrutiny of foreign investments in key sectors. When a company is categorized as core, foreign entities seeking to acquire a stake of 1% or more must file for a national security review. In cases of full buyouts, a review is mandatory for companies like Seven & i, regardless of their core status.
Seven & i has stated that its classification is unrelated to Couche-Tard’s buyout proposal. The company was among 88 newly added to the list, which encompasses sectors like nuclear power, space, and semiconductors. While convenience stores are not typically subject to national security reviews, Seven & i’s diverse businesses, including financial and security services, may have contributed to its core classification.
The buyout offer from Couche-Tard was rejected by Seven & i, citing concerns about shareholder value and potential antitrust challenges in the US. US antitrust regulators have indicated a possible probe into the deal, and Seven & i has engaged Nomura to advise on the potential takeover.
