Seven & I Considers IPO for North American Convenience Store Subsidiary

Seven & I Holdings Co. is exploring the possibility of an initial public offering (IPO) for its North American convenience store division as part of a strategy to finance a management buyout proposed by its founding family, according to informed sources.

The 7-Eleven Inc. subsidiary, a significant revenue driver for the Japanese retail giant, is valued between 4 trillion yen and 5 trillion yen. The funds generated from the potential sale of shares in this subsidiary are intended to support the management buyout, which is estimated to require around 9 trillion yen.

A member of the founding family initiated this buyout proposal in response to a takeover bid from Canadian convenience store operator Alimentation Couche-Tard Inc., known for its Circle K brand. However, the specifics regarding how to secure the required financing remain uncertain.

The listing venue for the 7-Eleven shares has not yet been determined. Nevertheless, it is anticipated that Seven & I will maintain a significant stake in the subsidiary if the IPO moves forward.

As of December 2023, the North American subsidiary operates approximately 13,000 stores throughout the United States, with many located in proximity to gas stations. The acquisition of Speedway LLC in 2021, a deal that made 7-Eleven the third-largest convenience store chain in the U.S., has bolstered its market presence.

For the fiscal year ending February, 7-Eleven's revenue is projected to reach around 8.3 trillion yen, comprising about 70% of the overall revenue for the Seven & I Holdings group.

Previously listed on the New York Stock Exchange, 7-Eleven was delisted in 2005 and became a wholly owned subsidiary of Seven & I Holdings. During a recent press event, Chief Financial Officer Yoshimichi Maruyama commented on the undervaluation of the North American business, indicating that various strategies to enhance its value are under consideration.