Guest post by Kei Izawa

The attempted acquisition of Seven & i Holdings by Couche-Tard has become a major topic of discussion, and I would like to share my thoughts on the matter. Even as an outsider with limited facts in hand, I still want to explore why the acquisition attempt failed and consider what I would have done had I been the person in charge of the negotiation.

Perhaps the biggest gap lies in the Japanese corporate mindset: shareholders are not necessarily regarded as the central stakeholders. This does not mean that Japanese companies ignore shareholders, but rather that the core of the Seven-Eleven business lies elsewhere. For example, the majority of its operations are based on its franchise model. As of the end of June 2025, there are 21,756 Seven-Eleven stores in Japan, and more than 95% of them are franchise-operated. In addition, there are 181 dedicated factory hubs nationwide, approximately 150 joint distribution centers shared with manufacturers, and while it is difficult to determine the exact number of supplier companies, there are around 60 core vendors that provide original products, and a vast number of national brands. These are all considered important stakeholders. Naturally, employees are also regarded as essential stakeholders.

Acquisition means one company purchasing all or most of another’s shares to gain control and direct its operations and strategy. Seven-Eleven Japan is probably uneasy that Couche-Tard will impose Western corporate management techniques, potentially transforming their long-standing, ‘village-like’ relationships with Japanese stakeholders. In Japanese, the word “acquisition” often carries the nuance of a hostile takeover, and the honest sentiment is that unless a company is performing extremely poorly or there is a clear strategic benefit, it would prefer not to be acquired.

The Sengoku-era warlord Takeda Shingen (1521–1573) is said to have remarked, “Men are the castle, men are the stone walls, men are the moat.” meaning the strength of a fiefdom is supported by its people. In this analogy, the “castle” represents the organization as a whole, the “stone walls” symbolize the capabilities and roles of the individuals who support it, and the “moat” represents the environment and conditions that protect them. Shingen emphasized the importance of human resources, asserting that no matter how impressive the castle or its stone walls may be, without people within, they are meaningless.

I’m keen to examine how Aikido principles can be applied to business acquisitions. This would necessitate a highly nuanced and strategic approach, prioritizing harmony, redirecting energy, and leveraging existing momentum. The goal is to achieve the desired outcome with the least amount of friction and the greatest benefit for all parties involved, rather than risking an outcome that could be unexpectedly perceived as a hostile takeover.

Guy Gendron, who authored the biography of Couche-Tard founder Alain Bouchard, recalled a comment from Bouchard’s partner Richard Fortin about the company’s corporate culture:

 “Our logo is an owl. We perched on our branch, looked at the numbers, and when we spotted prey that seemed weak enough, we swooped down on it.”

Couche-Tard opened its first store in Quebec, Canada, in 1980. It entered the U.S. market in 2001 through the acquisition of the Bigfoot chain, followed by the purchase of Circle K, the convenience store operator of oil company ConocoPhillips, in 2003. It has since grown into a global player. Couche-Tard now operates approximately 17,000 stores, 62% of which are relatively large and company-operated—this contrasts sharply with 7-Eleven in Japan. While both companies have nearly equivalent revenues, Couche-Tard posted net profits of $2.7 billion for the fiscal year ending April 2024, more than double the $1.2 billion (173 billion yen) reported by Seven & i for the fiscal year ending February 2025.

Alain Bouchard had been eyeing the acquisition of Seven & i for about 20 years. For him, acquiring the company was not only about realizing his ambition of building the world’s largest convenience store chain, but also about solidifying his legacy as a retail entrepreneur. In 2023, the Japanese Ministry of Economy, Trade and Industry released guidelines on corporate takeovers, encouraging foreign strategic players to enter the Japanese market, while stressing that Japanese companies needed to take M&A bids seriously. Against that backdrop, Couche-Tard submitted a $47 billion buyout proposal in 2024 to acquire Seven & i Holdings. The company also hinted at its willingness to raise the offer further, effectively stirring up pressure from activist investors. The offer represented a roughly 48% premium over Seven & i’s undisturbed share price prior to the acquisition proposal.

Couche-Tard’s business model is largely based on convenience stores attached to gas stations, which is quite different from the Japanese model. However, with the growing adoption of hybrid and EVs, gasoline sales are expected to decline over time. From a long-term perspective, the idea of shifting focus to food offerings, including fresh food like in Japan’s convenience stores, seems to hold significant strategic interest for Couche-Tard.

That said, Couche-Tard showed little sign of clearly articulating how it intended to contribute to Seven & i post-acquisition. While the ambition to build the world’s largest convenience store chain was evident, ironically, the acquisition proposal triggered stronger shareholder protection measures within Seven & i itself. As a result, the company recognized the need to focus more sharply on its core businesses and boost its stock price in order to avoid becoming a buyout target.

Couche-Tard announced on July 18 that it would withdraw its bid to acquire Seven-Eleven, and it wasn’t until July 22 that Seven & i issued its response to Couche-Tard’s stated reasons for the withdrawal. For a failed acquisition attempt, it’s rare in Japan to see the target company respond with a rebuttal like this.

Nikkei Asia reported Couche-Tard stated that Seven & i failed to take the negotiations seriously, quoting Mark Kelly, CEO of boutique UK advisory firm MKP Advisors, who said:

“Couche-Tard’s letter notifying Seven & i’s board of directors of its decision to scrap the proposal is as aggressive a calling out of a target management team as I’ve seen in decades.
 They are clearly trying to appeal to activist investors to take sizable positions in the Japanese company and force it to change its behavior.”

On the other hand, Nikkei Asia also noted that Seven & i’s main concern was Couche-Tard’s inability to clearly identify qualified buyers for the business assets likely to be subject to divestiture due to antitrust concerns. This lack of clarity by Couche-Tard was one of the major reasons for the failure of the deal, according to Seven & i Holdings.

The reasons cited by Couche-Tard for withdrawing remain vague. As Mark Kelly suggested, this appears to be a calculated move to provoke activist investors. It wouldn’t be surprising if Couche-Tard still has intentions to acquire Seven & i, and their recent remarks were a kind of “parting shot or sute serifu(捨てセリフ） in Japanese” to test the waters by provoking a response from activist shareholders while pretending to back down. That “parting shot” likely left a bitter impression on Japanese institutional investors.

Let’s consider what kind of approach could have been taken if an Aikido-style negotiation had been applied in the following posting. Of course, as outsiders, there may be details we’ve missed—but even by looking only at the final actions, it’s clear that this was not necessarily a well-conducted negotiation.

To be continued…

This article was created in collaboration with HSM Management.