Circle K Owner attempts to buy 7-Eleven

Wed, 08/28/2024

by Ellie LeTu

Source: WSJ

• Alimentation Couche-Tard (ACT) is attempting to buy Seven & i Holdings (7i)

  • ACT is a Canadian company and the owner of Circle K.

  • Seven & i Holdings (7/11) is a Japanese company and the owner of 7 Eleven.

  • Convenience store market is highly fragmented in the USA.

• Potential synergies

  • Combination of the two biggest convenience store chains in the USA.

    • Would give them a 13% market share (next closest is 2%).

  • 31% of Circle K stores have a 7 Eleven within a 1 mile radius.

    • Cuts down on delivery costs.

  • 7-Eleven has a thriving Japanese business which is very attractive to ACT.

• Potential concerns

  • Major hurdles with regulators in Japan and the USA.

    • Two largest competitors in one space merging usually does not get approved.

  • Will be a tough sell for ACT to 7/11’s board.

    • Makes way more sense for ACT than it does 7/11.