Seven & i is shifting its focus back to 7-Eleven by selling its supermarket division and planning an IPO for its American branch by 2026. This strategy is aimed at strengthening its market position against Couche-Tard. A $5.37 billion sale will fund a significant share buyback, boosting the company’s valuation. Leadership changes include Stephen Dacus becoming the first non-Japanese CEO. With 85,000 locations, 7-Eleven remains the largest global convenience store chain, despite regulatory scrutiny concerns.
Seven & i’s Strategic Shift to Fortify Its Market Position
The renowned Japanese corporation, Seven & i, is pivoting its focus back to the 7-Eleven convenience store chain by divesting its supermarket business and preparing to launch its American subsidiary on the stock market. This strategic move aims to bolster its defense against the ambitions of its Canadian competitor, Couche-Tard.
Plans for American IPO and Share Buyback Initiative
The retail giant has announced its intention to list the American branch of 7-Eleven on a major U.S. stock exchange by the latter half of 2026, enhancing its visibility and investor appeal. Concurrently, Seven & i has inked a deal with a Bain Capital subsidiary to sell its supermarket division for an impressive $5.37 billion. This capital infusion will facilitate a significant share buyback program, amounting to 2 trillion yen (approximately $13.4 billion), aimed at improving its overall valuation by fiscal year 2030-2031.
Recent reports about this substantial share repurchase have led to a surge in investor interest, resulting in a remarkable 10% jump in Seven & i’s stock price on Thursday, ultimately closing with a 6.5% increase.
In a noteworthy leadership change, Seven & i will see Stephen Dacus, a seasoned retail executive and current independent director, take over as CEO from Ryuichi Isaka, marking a historic moment as he becomes the first non-Japanese CEO of the company.
“We believe the time has come to accelerate our initiatives. Our management is committed to enhancing shareholder value and enacting transformative strategies,” emphasized outgoing CEO Ryuichi Isaka in a recent statement.
Despite initially rejecting a buyout offer from Alimentation Couche-Tard in September, claiming it undervalued the company, Seven & i faced pressure as Couche-Tard presented a revised offer valuing the company at $47 billion. To fend off a potential takeover, discussions were initiated by the Ito family, aiming to buy out all shares and delist the company, but these talks ultimately fell through, contributing to a 20% drop in stock value since the year’s start.
However, the anticipated share buyback is expected to positively impact the valuation of remaining shares. Seven & i’s prior announcement of a comprehensive restructuring plan in mid-October, focused on reinforcing its 7-Eleven chain while creating a distinct unit for managing other subsidiaries, aligns with this strategic refocusing.
With 85,000 locations across approximately 20 countries, 7-Eleven stands as the largest convenience store chain globally. In comparison, Couche-Tard operates around 16,700 stores in 31 countries, including the Circle K brand. The integration of 7-Eleven’s extensive network in Asia and North America could potentially forge an international retail powerhouse, although this path may encounter scrutiny from U.S. anti-monopoly regulators.
Couche-Tard has expressed its willingness to engage in constructive discussions with Seven & i to reach an amicable agreement and smoothly navigate the regulatory approval process. The Japanese government is closely monitoring the situation, having classified Seven & i as an “essential” entity, especially given that a quarter of 7-Eleven stores are situated in Japan, where they serve a vital role in daily convenience, offering everything from ready-to-eat meals to concert tickets.
In early January, Tokyo underscored that the future of Seven & i is intrinsically linked to the nation’s “economic security.”