Alimentation Couche-Tard’s bid for Seven & i Holdings, the Japanese owner of 7-Eleven, remains hung up on “serious U.S. antitrust challenges,” said Ryuichi Isaka, Seven & i’s outgoing CEO, in a statement on Wednesday.
Isaka added that Seven & i and Couche-Tard — who have been in merger talks for eight months — have made “no meaningful progress on finding a solution” to these issues.
Isaka’s comments come about a month after Seven & i and Couche-Tard revealed they’d begun identifying potential buyers for at least 2,000 overlapping c-stores in North America to appease antitrust concerns in pursuit of their merger. By mid-March, the retailers were having prospective buyers sign non-disclosure agreements.
Although the divestiture plan seems to have stalled, conversations between the two retailers are still ongoing, and they even met before Seven & i shared its quarterly earnings report on Wednesday, according to a Q&A released Wednesday morning.
“At the moment, we are having constructive conversations with ACT to see if we can find a way forward together,” Seven & i said in the Q&A, which does not specify who is speaking.
Seven & i is also developing plans to boost its own operations in case the merger doesn’t materialize. These include a planned IPO of its North American operations, 7-Eleven Inc., as well as selling some non-core businesses and other assets, leadership changes and share buybacks.
Seven & i pointed to the Kroger-Albertsons attempted merger not only as a lesson in how difficult these megadeals can be to pull off in the U.S. due to antitrust concerns, but also the danger of not continuing to develop as a company during that process.
The Kroger-Albertsons merger dragged on for more than two years before it fell apart, and by focusing on the merger instead of its own operations, Seven & i believes Albertsons was weakened as a company.
“We are taking a cautious approach, as we believe that entering into an agreement and then experiencing insolvency within two years does not align with the interests of our shareholders,” said Seven & i in the Q&A.
