7-Eleven deal likely to face antitrust issues: retail analyst

Alimentation Couche-Tard, the operator of Circle K, has offered to acquire its Japanese rival and owner of 7-Eleven. Seven & I Holding CompanyApple is likely to attract scrutiny from antitrust authorities, especially in the US, according to the retail analyst.

“I imagine there will be some regulatory concerns and some divestments required in order to achieve that goal.” [deal] “This is a huge opportunity,” Brian Gildenberg, managing director of Retail Cities, told CNBC.

Gildenberg noted that 7-Eleven and Circle K are the two largest retail chains in the United States, and said he expected the U.S. Federal Trade Commission to have a “very strong view” of the potential merger, while Japanese regulators would also have concerns.

Seven & I Holding Company He said It received an initial takeover offer from Canadian company Couche Tard on Monday. Which confirmed It made a “friendly, non-binding proposal” and did not disclose how much it was willing to pay for the company.

If the deal closes, the combined company would represent 12.3% of the U.S. retail market, according to a note Monday from Canaccord Genuity Capital Markets. The next biggest player in the space is CaseyBy 1.7%, according to the note.

The antitrust risks in the United States would be particularly stark in Florida and Texas, where stores overlap “quite significantly,” Gildenberg said.

While Kush Tard has About 16,700 stores worldwide, far fewer than Seven & i Holdings’ approximately 85,800He commands the highest Huawei’s market value stood at $57 billion at the close of business on Monday, compared with about $38 billion for the Tokyo-listed company.

Seven & i shares rose 23% in trading on Monday, while Couche-Tard lost more than 2% after news of the proposed offer. Seven & i shares fell about 11% on Tuesday.

If the deal goes through, it would be the largest foreign acquisition ever of a Japanese company and more takeovers in the country could follow, Gildenberg said.

“If you’re looking to expand internationally, Japan is the third-largest market in the world and one of the least penetrated, in some ways, by global companies,” he said, noting that almost all of Japan’s major retailers are domestic names.

“The opportunity to access this market at this size is huge.”

Kush tard too It was announced A deal to buy US company GetGo, which operates about 270 retail and fueling locations across the United States.

According to Gildenberg, this shows that Coach Tard is looking to enhance its food service offerings — a strength of both GetGo and 7-Eleven.