Couche-Tard's Failed Bid for 7-Eleven Owner Sparks Debate Over Foreign Takeovers in Japan

Alimentation Couche-Tard's decision this week to walk away in frustration from its US$46 billion (S$59 billion) bid for 7-Eleven owner Seven & i Holdings set off a debate in Tokyo as to what lessons foreign companies with ambitions for mergers and acquisitions should draw.

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The bid was audacious from the start. 7-Eleven convenience stores 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 members were so opposed to the deal that they turned to one of their arch-rivals to try to block it.

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 Mr Nicholas Smith, a strategist at CLSA.