Shares of Japanese retail giant Seven & i Holdings plunged sharply on Thursday after Canada’s Alimentation Couche-Tard unexpectedly withdrew its $47 billion acquisition offer.

The move, which came after nearly a year of unfruitful engagement, dashed hopes for what would have been the largest-ever foreign takeover of a Japanese company.

Seven & i’s shares were down 8.80% in Tokyo afternoon trading.

The collapse marks a setback for efforts to foster greater corporate openness in Japan, where executives have traditionally shown less responsiveness to shareholder demands for higher valuations compared to their global peers.

Analysts say Seven & i can now focus on improving operations following the end of Couche-Tard’s takeover bid.

However, any benefits may take time to lift the stock, and with less pressure to fend off a takeover, the company may ease up on shareholder-boosting efforts—prompting some investors to exit.

Breakdown in talks prompts Couche-Tard exit

Couche-Tard, which operates nearly 17,000 convenience stores globally, including the Circle K brand, announced late Wednesday it had withdrawn its proposal due to “a persistent lack of good faith engagement” from Seven & i leadership.

“There has been no sincere or constructive engagement from 7&i that would facilitate the advancement of any proposal,” the Canadian firm said in a sharply worded statement.

Seven & i, the parent company of 7-Eleven, expressed disappointment at Couche-Tard’s “unilateral” decision to terminate talks and rebutted many of the firm’s claims, describing them as “inaccurate” in a statement translated from Japanese.

Offer raised but never welcomed

Couche-Tard first approached Seven & i in August 2023 with an offer of $14.86 per share, which the Japanese firm rejected, calling it a significant undervaluation.

In October, the Canadian retailer raised its bid to $18.19 per share, or around 7 trillion yen ($47 billion), yet failed to gain traction with Seven & i’s leadership.

Couche-Tard argued that merging with Seven & i was the “most effective way to maximize value for all stakeholders,” but admitted it could not proceed without meaningful dialogue.

The deal would have brought together Couche-Tard’s global presence with Seven & i’s 87,000-store network, creating a dominant player in the global convenience-store sector.short-term shareholder returns.

Eyes on Seven & i’s next move

With Couche-Tard out of the picture, pressure is mounting on Seven & i to demonstrate the viability of its standalone strategy.

The company recently appointed its first foreign CEO, Stephen Dacus, and has pledged to streamline operations and unlock shareholder value.

A strategy update is expected in August.

“We remain fully committed to our standalone value creation plan,” the company said, highlighting initiatives such as a share buyback, divestment of non-core assets, and the potential listing of its North American convenience store unit.

According to Bloomberg Intelligence’s Lea El-Hage, “Its August strategy update will be key to demonstrating its standalone plan can generate more value than the rejected acquisition.”

Some investors remained skeptical that another suitor would step in following the drawn-out negotiations.

“It shows you can drag out the process to avoid being bought out,” said one shareholder, speaking anonymously, Bloomberg reported.

Focus may shift to operations, but investor momentum could fade

The company plans to list its North American business by the end of 2026 and aims to complete a ¥2 trillion ($13 billion) share buyback by early 2031—targets that suggest any meaningful returns for investors may take years rather than months.

In the latest quarter ended May, operating profits from its domestic convenience-store operations declined, partly due to costs tied to new product offerings.

In contrast, overseas profits rose, supported by the expansion of proprietary products in the US market.

“Seven & i’s management may be able to spend more time and resources improving its services and operational efficiencies, now that management no longer has to deal with Couche-Tard’s takeover talks,” said Tomoichiro Kubota, senior market analyst at Matsui Securities.

However, he cautioned that it could take considerable time for these efforts to translate into a higher share price.

Kubota said Seven & i’s efforts to boost its shares may not be as aggressive as before, since the company was taking these steps partly to stave off the takeover attempt.

Investors who were anticipating such moves are likely “to close their positions for now,” he said

Japanese resistance to foreign ownership surfaces again

The breakdown highlights the continued difficulties foreign investors face when attempting major acquisitions in Japan, a country where corporate boards are often wary of external influence.

Analysts pointed to a broader reluctance in Japan Inc to cede control, despite recent reforms aimed at improving governance and shareholder responsiveness.

“The moat of Japanese protectionism proved too much for Couche-Tard to cross,” said Andrew Jackson, head of Japanese equity strategy at Ortus Advisors.

He noted that Seven & i’s importance to Japan’s retail landscape and perceived strategic value made any foreign takeover “highly unlikely.”

The episode raises fresh questions about Japan’s openness to foreign capital.

While Couche-Tard’s exit may close the door on this deal, it reopens the debate on how Japan Inc should evolve in a global economy.

As Couche-Tard’s final 1,500-word statement suggests, patience may be running thin.

For Tokyo, the incident may well serve as a prompt to rethink how the country balances protectionism with its stated commitment to corporate reform.

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