Couche-Tard’s bid for 7-Eleven is audacious — but could see a Canadian company controlling a global colossus

It’s difficult not to marvel at the relentless ambition of Alain Bouchard, though the odds are against him in his latest awesome gambit.
Bouchard is not to be underestimated. 
From a single convenience store, or C-store, he co-founded with a partner in 1980 in the Montreal suburb of Laval, Bouchard built his Alimentation Couche-Tard into an enterprise that generates annual revenue of more than $95 billion from its 16,700 C-stores and gas stations in North America and Europe.
But at age 75, Bouchard can’t stop burnishing his legacy, though he long ago kicked himself upstairs to executive chairman.
This week, Couche-Tard, still based in Laval and operator of Circle K stores, confirmed that it has made a takeover offer for its Tokyo-based archrival, Seven & i Holdings, owner of 7-Eleven stores worldwide.
The bid by Couche-Tard (which roughly translates as “night owl”) is audacity squared.
The deal would create a global retail colossus with $206 billion in sales at more than 100,000 retail outlets in about 30 countries.
This is not an ego trip. Bouchard has been trying to join forces with 7-Eleven’s owner for two decades.
The union makes sense to him even though the price tag might reach $117 billion. The deal could require Couche-Tard to raise an estimated $50 billion in borrowed funds and from stock offerings.
But Couche-Tard, which derives about 75 per cent of its revenues from North America, is barely present in the Asia Pacific region, home to some of the world’s fastest-growing economies.
Seven & i operates in 10 of those markets, including South Korea, China, Malaysia, Singapore and the Philippines.
And in the past five years, Seven & i’s revenues have grown about three times’ faster than Couche-Tard’s.
The revenue surge has been driven by both acquisitions and internal growth.
From visiting 7-Eleven stores in Canada, you’ve noticed their growing emphasis on ready-to-go meals. You’ve waited in line behind a customer ordering jalapeno and cream cheese taquitos for himself and three buddies.
At 7-Eleven Japan, customers are ordering onigiri, rice balls wrapped in seaweed and stuffed with vegetables or fish. Seven & i sells about two billion rice balls a year.
With its constant stream of new fresh food offerings, Seven & i is reinventing the C-store as a commissary (minus the seating).
That has cut Seven & i’s reliance on the C-store staples of tobacco and gasoline.
Couche-Tard has shifted in that direction as well. But its food-supply chain isn’t as elaborate as Seven & i’s. And Couche-Tard doesn’t restock its stores as frequently as 7-Eleven Japan, where five deliveries a day to ensure freshness is not uncommon.
Finally, Bouchard’s planned combination would create economies of scale unheard of in the still-fragmented C-store industry, enabling the enlarged firm to extract bigger volume discounts from suppliers.
The upshot for Canadian 7-Eleven and Circle K customers could be lower prices for a wider variety of goods.
But the odds against this deal are daunting.
Foreign takeovers of Japanese companies are rare.
In recent years, managerial and political hostility has thwarted attempts by foreign companies to gain control of other iconic Japanese firms, including Toshiba and Sharp.    
The Japanese government is likely to object to a takeover of Seven & i, whose C-stores, or konbini, are integral to Japanese daily life.
Seven & i’s 21,000 C-stores in Japan provide basic banking and other services that make them essential to small towns.
They also provide food and water supplies in emergencies, such as earthquakes.
Antitrust regulators in Canada, the U.S. and Europe could block the deal outright or demand so many asset divestitures that the takeover rationale would evaporate.
And Bouchard has a track record of failed takeover attempts.
Couche-Tard has twice been rebuffed in acquisition overtures to Seven & i, most recently in 2020.
That same year, Couche-Tard was outbid by Seven & i for the U.S. Speedway chain of 3,800 C-stores and gas stations, for which the Japanese company paid $28 billion.
Bouchard backed out of a $7.6-billion deal in 2020 to buy Australia’s Caltex gas station chain when the purchase price got too high.
And the following year, Bouchard’s friendly $27-billion takeover bid for France’s Carrefour S.A., a hypermarket and C-store operator, was blocked by the French government on grounds of “food security.”
But it would be folly to doubt the takeover prowess of Couche-Tard, which rolled up Mac’s Milk, Red Rooster and other Canadian chains before expanding to the U.S. with its 2003 acquisition of the Circle K chain of 2,300 stores.
Couche-Tard later paid a total of $11 billion for the 4,300 European retail outlets of oil giants Statoil and TotalEnergies.
The prospect of another failed megadeal on his record might strengthen Bouchard’s resolve to close this deal, the biggest in his remarkable career.
It’s a long shot, but there might be rice balls in his future.