Japan Can Afford To Keep Quiet On 7-Eleven Bid

Sometimes silence is golden. Japan's government will ultimately need to block or clear any formal takeover offer from Canada's Alimentation Couche-Tard for Seven & i, the owner of 7-Eleven convenience stores.

The stores known as “conbini” are so deeply embedded in everyday life in Japan that they are akin to national infrastructure. I Photo: トレインファン Wikimedia Commons

For now, though, Tokyo is better off staying quiet, Una Galani wrote in a column for Reuters Breakingviews.

The stores known as “conbini” are so deeply embedded in everyday life in Japan that they are akin to national infrastructure. The outlets serve as food retailers, places to pay bills, and locations for dropping off luggage before boarding a train.

They provide vital services to rural communities during natural disasters. If stores don't perform, they can significantly impact people's lives. Moreover, Japan, like other developed countries, has increased its scrutiny of foreign investment in recent years.

However, the government will need to balance any concerns about a takeover by the Canadian operator of Circle K stores against its official efforts to improve corporate governance and shareholder value in Japanese companies.

As part of a broad campaign to shake off three decades of economic stagnation, the Ministry of Economy, Trade and Industry is working to attract foreign direct investment (FDIs) and create a welcoming environment for outside investors, including activists.

It is encouraging Japanese companies to seriously consider bona fide feasible takeover bids.

If policymakers objected to Couche-Tard, as French ministers did when the $55 billion company tried to buy supermarket operator Carrefour in 2021, they would undermine the message that Japan is open for business.

Fortunately, politicians can afford to remain silent. Couche-Tard's offer is currently non-binding. If formalized, the special committee of Seven & i board members will have to judge it against the company's existing value-creation plans.