Seven & i Buys CST Stores in U.S. Push, Not Keen on Takeover Bidby and
Japanese owner of 7-Eleven seeks to expand in U.S. market
Seven & i says not interested to buy entire CST Brands chain
Seven & i Holdings Co., the world’s largest convenience store operator, will buy 79 gas stations and convenience stores in California and Wyoming from CST Brands Inc., but won’t bid for the entire company even as it seeks to expand in the U.S. to offset slowing demand in Japan.
The Japanese retailer’s U.S. unit, 7-Eleven Inc., entered the agreement with San Antonio-based CST Brands for an undisclosed sum, and the deal is expected to close next month, the buyer said in a statement dated June 2.
Seven & i isn’t interested in acquiring the whole of CST Brands, Tokyo-based spokesman Minoru Matsumoto said via telephone. The U.S. based retailer, which has over 2,000 outlets in the U.S., had said in March it was conducting a strategic review to improve shareholder value.
CST Brands rose the most in more than three years Thursday after Reuters reported that Canada’s Alimentation Couche-Tard Inc. and Seven & i had submitted bids. The shares gained 18 percent to $44.95 at the close in New York, the biggest gain since April 2013.
Seven & i shares rose as much as 2.2 percent to 4,724 yen in Tokyo trading Friday, the biggest intraday increase in more than three weeks.
While the agreement to buy CST’s 79 stores will have only minimal impact on results for the current year ending in February 2017, it’s expected to contribute to profit over the medium term and longer, 7-Eleven said.
Seven & i President Ryuichi Isaka, who was officially appointed May 26, has an ambitious plan to announce a growth strategy and structural reform plan for the retailer 100 days from taking office. Success with a U.S. expansion is critical for the company as it faces myriad challenges, including restructuring a money-losing supermarket unit and intensifying competition from domestic rivals FamilyMart Co. and Lawson Inc.
Isaka laid out plans to increase the number of 7-Eleven outlets in the U.S. to boost its market share that stands at about 6 percent, he said in an interview last month. The Tokyo-based company also wants to raise the average daily sales at about 8,500 convenience shops it runs in the U.S. and Canada by 10 percent to $5,500 per outlet, according to Isaka.