If successful, the deal would be Couche-Tard’s largest and would likely face regulatory scrutiny in both Japan and the United States
, the Japanese parent of 7-Eleven, with an acquisition proposal that would position the Montreal-based company to dominate the global convenience-store industry.
There are roughly 13,000 7-Eleven locations in the U.S., which, according to Canaccord Genuity analyst Luke Hannan, represents 8.5 per cent of the entire market. Couche-Tard’s Circle K locations are the second most common convenience stores in the U.S., with a 3.8-per-cent market share, Mr. Hannan said in a note to clients on Monday.
Any deal that wins U.S. regulatory blessing will also require approval in Japan, where Western countries have long struggled to complete acquisitions in a regime Ms. Nettel described as “onerous.” However, recent changes to Japanese M&A review procedures could work in Couche-Tard’s favour. Of all the challenges a potential deal might face, analysts believe financing is among the smallest. RBC’s Ms. Nattel said Couche-Tard has the ability to take on US$19-billion in debt to fund a possible transaction. In another note to clients published on Sunday, before the Seven & i proposal was first disclosed, Ms. Nattel said Couche-Tard’s “attractive cost of capital could very well give rise to an accelerated pace of M&A after a relative drought” between 2018 and 2023.
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