Japan to consider 'economic security' in 7-Eleven takeover
Japan will look at the "economic security" aspects of any foreign acquisition of 7-Eleven, a government minister said as Canada's Couche-Tard pursues a takeover of the world's largest convenience store chain.
Alimentation Couche-Tard, which owns the Circle K brand, wants to buy the store owner's parent Seven & i but the Japanese firm last year rejected an initial offer worth nearly $40 billion.
That led the Canadian company to make a revised bid reportedly 20 percent higher.
"Economic security is a new area... but, for example, I think the acquisition of 7-Eleven is majorly related," Ryosei Akazawa, Japan's minister for economic revitalisation, said on Wednesday.
Akazawa highlighted the role Japan's convenience stores can play in times of crisis, such as after major earthquakes and other disasters, particularly in remote regions.
"If, for example, 7-Eleven becomes completely owned with foreign capital, to pursue profitability as its first priority, would it really offer full cooperation when a disaster occurs?" he asked reporters.
His comments came after US President Joe Biden blocked Nippon Steel's $14.9 billion takeover of US Steel on Friday, citing national security concerns.
The move drew harsh criticism from the Japanese government and businesses, which invested almost $800 billion in the United States in 2023.
The Japanese finance ministry designated Seven & i in September as a "core" industry in national security terms.
Other entities with the same designation in Japan include manufacturers in the nuclear, rare earths, and chip industries, as well as cybersecurity and infrastructure operators.
Seven & i said at the time that the rating "has nothing to do with the takeover offer" from Couche-Tard.
It said in November it was studying a counter-offer from the company's founding family reportedly worth eight trillion yen ($50 billion).
Japanese media quoted Couche-Tard executives as saying they would not sweeten the bid again, or launch a hostile offer.
The 7-Eleven franchise began in the United States but it has been wholly owned by Seven & i since 2005 and has 85,000 stores worldwide.
Seven & i reported on Thursday an 89 percent drop in net profit in the three months to November 30 to 11.4 billion yen ($72.1 million), worse than market forecasts.
Revenues stagnated at 3.0 trillion yen, with inflation hitting consumption in Japan -- home to around a quarter of its stores -- and the United States.
The poor results could prompt activist shareholders to step up pressure for a takeover by Couche-Tard.
