When the owner of 7-Eleven revealed this week that it received a buyout offer from a Canadian competitor, it caused quite a stir in Japan. This is unprecedented, as a Japanese company of this size has never been acquired by a foreign firm before. Traditionally, Japanese companies were the ones buying businesses overseas.
7-Eleven, the world’s largest convenience store chain, operates 85,000 stores across 20 countries and regions. It’s particularly known for offering quick, affordable, and tasty meals, even in places like Japan and Thailand, where there are already plenty of dining options.
“We have more stores than McDonald’s or Starbucks,” said Ryuichi Isaka, the CEO of Seven & i Holdings, in an interview with BBC News before the buyout offer. About a quarter of those 85,000 stores are located in Japan, with around 10,000 in the US.
A big player
Quebec-based Alimentation Couche-Tard, which owns the Circle K chain, operates nearly 17,000 stores in 31 countries, with most of them in North America. The approach valued Seven & i at over $30 billion (£23 billion) before news of the offer came out.
7-Eleven’s shares surged more than 20% on Monday, but they lost some of those gains the next day. Analysts suggest that the weak Japanese yen against the US dollar and other major currencies has made Seven & i more affordable. Additionally, efforts by the Japanese government to encourage mergers and acquisitions seem to be paying off, according to Manoj Jain from Hong Kong-based hedge fund Maso Capital.
However, the proposal is still in the early stages, and given the potential size of the deal, it could face scrutiny from competition authorities.
7-Eleven has focused on making the most of the popularity of its diverse food offerings, including rice balls, sandwiches, pasta, fried chicken, and dumplings. While convenience stores in many countries are often places to grab a quick snack, in Japan, 7-Eleven has become a go-to spot for unique culinary experiences. These dishes have made 7-Eleven a social media sensation in Asia.
In Thailand, visiting a 7-Eleven store has even become a must-do activity, with items like their ham and cheese toastie becoming a TikTok favorite. Celebrities like British singer Ed Sheeran have also boosted 7-Eleven’s profile—his video trying snacks from a store in Thailand went viral.
Mr. Isaka has been working to replicate 7-Eleven’s success in the US and European markets, especially as investors push the company to streamline its operations and concentrate on the 7-Eleven brand. The company has been updating its strategy, aiming to have more stores adopt the approach of its Japanese outlets.
“What we found is that stores selling fresh food are drawing in many more customers,” Mr. Isaka explained. “We want to grow with high quality, not just by increasing the number of stores. Our goal is to ensure customer satisfaction and boost sales at each location while expanding our presence,” he added.
American roots
Seven & i has also been expanding its business through acquisitions. In January, it purchased over 200 stores in the US from the petrol station chain Sunoco for about $1 billion (£770 million). Then, in April, the company bought back more than 750 stores from a franchisee in Australia.
For most of its nearly 100-year history, 7-Eleven was originally an American brand. It began in 1927 by selling blocks of ice to keep refrigerators cool and later added essentials like eggs, milk, and bread to its stock. The name “7-Eleven” comes from the stores’ original operating hours, which were from 7:00 AM to 11:00 PM.
As 7-Eleven expanded, it began offering franchise opportunities outside the US. In 1974, the Japanese retail company Ito-Yokado made a deal to open the first 7-Eleven in Japan. By 1991, Ito-Yokado had acquired a 70% stake in the chain’s US parent company.
Masatoshi Ito, the founder of Ito-Yokado, who passed away in 2023 at 98, is often credited with turning 7-Eleven into a global powerhouse. In 2005, Ito-Yokado was renamed Seven & i Holdings, with the “i” in the name honoring both Ito-Yokado and Mr. Ito, who was then the company’s honorary chairman.
Now, as Seven & i faces a decision on whether to stay under Japanese ownership or return to North American control, experts are speculating that more major Japanese firms could become takeover targets. According to Mr. Jain, there is a “greater willingness” among Japanese boards and management teams to accept foreign investment and consider offers from abroad. This shift might encourage more foreign investors to explore opportunities with Japanese companies.