Good morning. Canadian convenience store giant Couche-Tard is in talks to buy 7-Eleven – more on that below, along with much-needed mpox vaccines and a chaotic summer of overtourism in Europe. But first:
Today’s headlines
- President Biden issues a plea to defend democracy at the Democratic National Convention
- Israel recovers the bodies of six hostages from Gaza as U.S. Secretary of State Blinken tries to advance a ceasefire deal
- CN Rail and Canadian Pacific Kansas City wind down operations as a possible shutdown nears
One of the roughly 3,000 7-Elevens in Tokyo.Kim Kyung-Hoon/Reuters
Retail
Grab ’n’ go
For North Americans accustomed to the Big-Gulp-and-gasoline vibes of a 7-Eleven, stepping into Japan’s version of the convenience store can be a wildly disorienting experience. There’s a boatload of fresh and prepared food, for starters: grilled mackerel bento boxes, fluffy egg salad sandwiches, compact rice balls stuffed with pickled plum or salty roe. The alcohol selection (sake, Scotch, Champagne) is downright impressive. But Japanese 7-Elevens also serve as community hubs, places where people can file their taxes, obtain residence certificates, buy insurance or pay bills. And they don’t have to go far to do it. There are more than 21,000 7-Elevens in Japan alone, roughly a quarter of the total outlets in the world’s largest convenience-store chain.
Just a few weeks ago, the chain’s Japanese owner, Seven & i Holdings, said it would bring more of those food options to 7-Elevens in places like the U.S., as part of a push to expand from about 85,000 to 100,000 stores by 2030. It all proved pretty appetizing for Canadian convenience store giant Alimentation Couche-Tard Inc. Yesterday, the company offered a “friendly, non-binding” bid to acquire Seven & i, which is worth US$49-billion. (The size of the offer hasn’t been disclosed.) If the deal is successful, this would be the largest foreign acquisition of a Japanese company in history. It would also make Couche-Tard – already Canada’s second-biggest company by revenue – one of the biggest retailers on the planet.
Scaling up
In an industry still full of small chains and mom-and-pop shops, Couche-Tard and Seven & i are the rare consolidators. After fully taking over 7-Eleven in 2005, Seven & i purchased U.S. gasoline networks like Speedway and Sunoco. Within about a dozen years of first opening in Quebec in 1980, Couche-Tard acquired 60 Mac’s stores; in 2003, it bagged the entirety of Circle K. (Most of Couche-Tard’s 17,000 stores around the world are branded Circle K.)
Since then, the Canadian retailer not only bought up more convenience stores (The Pantry, CST Brands) and service stations (Statoil, TotalEnergies), it also began catering to electric vehicles. In Norway – where enthusiasm for electric cars is pretty much unmatched, and where the company sees its operations as a lab for the EV age – Couche-Tard runs hundreds of charging stations at its Circle Ks. It even sells at-home and office chargers and is experimenting with its own batteries.
There are nearly three dozen charging stations at this Circle K in Norway.Nathan Vanderklippe/The Globe and Mail
Not every takeover attempt has turned out rosily: In 2020, Couche-Tard lost out to Seven & i in the battle to purchase Speedway. The following year, the company tried and failed to buy the French supermarket chain Carrefour, after the US$20-billion deal was spiked by Emmanuel Macron’s government. But in a meeting with analysts and investors last October, CEO Brian Hannash said more mergers and acquisitions were very much part of the five-year plan. “We’re not here to manage a drift,” he insisted. “We play to win.”
Persistence pays off?
Whether Couche-Tard will win its bid to buy 7-Eleven remains an open question. Foreign takeovers of Japanese companies are exceptionally rare, although recent changes in the country’s M&A guidelines make it harder for companies to rebuff “bona fide” offers. And Couche-Tard hasn’t exactly been coy about its interest. According to the Financial Times, the retailer attempted to open friendly discussions with Seven & i multiple times in the past two years. Japanese media dates the initial outreach to 2020.
But as The Globe previously reported, Couche-Tard’s pursuit of 7-Eleven goes all the way back to 2005. At a restaurant in Tokyo, interpreters by their sides, Couche-Tard’s founder, Alain Bouchard, first sat down with his Seven & i counterpart, Masatoshi Ito, to mull the possibility of a merger. Well, Bouchard mulled, making a passionate pitch about their complementary businesses. Ito heard him out, then launched into a lengthy rejection.
As soon as he was done, Ito pushed away from the table and pulled out a tiny disposable camera, snapping a photo of Bouchard’s face. “Later on, he sent me the photo,” Bouchard told The Globe then. “And that was the end of that.” It may have taken nearly two decades, but the picture could now look entirely different for these convenience-store rivals.
The Shot
‘The wind was very strong. Bad weather was expected, but not of this magnitude.’
The Coast Guard, Italian fireboats and a helicopter all search for missing passengers.ALESSANDRO FUCARINI/AFP/Getty Images
The search for passengers continues after a sudden, violent storm sunk a luxury superyacht off the coast of Sicily. Mike Lynch – a British tech billionaire – and his teenage daughter are among the missing, and a Canadian has died. Read more here.
The Wrap
What else we’re following
At home: If you’re looking to file a freedom of information request, Quebec City is a great place to do it – you’ll hear back within 12 days, a Globe audit has found. (In Edmonton, that climbs to 69 days.) When it comes to redactions, Halifax is the worst offender: The city released just 2 per cent of its files in full.
Abroad: As Foreign Affairs Minister Mélanie Joly embarks on a four-day tour of Ivory Coast and South Africa – promising $1-million in extra aid to the World Health Organization to fight mpox – the U.S. will deliver its first vaccine doses to Congo next week.
Traffic jam: Way too many people. Not nearly enough elbow room on the streets. Welcome to high season in Europe.
AI scam: Taylor Swift has not publicly endorsed a presidential candidate, but that didn’t stop Donald Trump from posting a doctored image of the singer (dressed up like Uncle Sam) asking Americans to vote for him.