Alimentation Couche-Tard’s decision to walk away in frustration from an attempted acquisition of Seven & I Holdings set off a debate in Tokyo as to what lessons foreign companies with ambitions for mergers and acquisitions should draw.
The bid was audacious from the start. 7-Eleven convenience stores operated by Seven & I have one of Japan’s most recognizable brands, and a takeover would have been the largest by a foreign entity in the country’s history. Moreover, the founding Ito family were so opposed to the deal that they turned to one of their archrivals to try and block it.
Still, the government, which has been pushing for companies to take a more investor-friendly approach, did not raise strong political opposition, even though Seven & I had sought greater protection under a law that could have scuttled a deal. While Couche-Tard placed the blame squarely on intransigence from Seven & I’s management, the failure of the deal runs counter to the broader trend in the investing landscape, according to Nicholas Smith, a strategist at CLSA.
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