7-Eleven’s Japanese owner wants to be considered a “core” business sector, like chip manufacturing

Seven & i Holdings is seeking to move its status to a “core” rating under Japan’s Foreign Exchange and Trade Act (FEFTA), Bloomberg and Financial Timesciting unnamed sources.

FEFTA requires foreign investors to notify the Japanese government if they wish to acquire a stake in a Japanese firm considered part of a “core” business sector. Previously, the government granted this status to companies in the semiconductor and nuclear industries to address the risk of commercial technologies being used for military purposes.

Just two weeks ago, it expanded its list and designated chip equipment makers as a “core” business sector. Governments are increasingly focusing on chipmaking tools as a key part of the semiconductor supply chain.

Seven & i Holdings made the request after being approached by Alimentation Couche-Tard with a preliminary full takeover proposal, according to Bloomberg. Seven & i Holdings has a market capitalization of $38 billion, and if the takeover of Alimentation Couche-Tard is successful, it would be the largest takeover of a Japanese company.

If Seven & i’s status is upgraded, any potential foreign buyer would be subject to scrutiny by Japan’s Ministry of Finance. (Normally, a foreign takeover of a company that is not designated as “core” needs government approval only after an agreement is reached). Japan has not officially blocked any trade since FEFTA was amended in 2020, according to law firm Mori Hamada & Matsumoto.

Shares in Seven & i Holdings fell about 1 percent in Japanese trading on Wednesday following news of the company’s protection request.

Seven & i Holdings declined to comment when approached by wealth. Japan’s Finance Ministry did not immediately respond to a request for comment.

7-Eleven: A vital part of Japan?

Although perhaps not as flashy as a semiconductor company, 7-Eleven stores play a key role in Japan’s convenience store sector and are part of everyday Japanese life. Beyond offering food and drink, a 7-Eleven in Japan also offers round-the-clock access to services such as ATM cash withdrawals, printing and scanning, bill payments, municipal services and package delivery.

7-Eleven, originally an American brand, first came to Japan in 1974 after Ito-Yokado opened the first outlet in Tokyo. The Japanese retail company bought a 70% stake in 7-Eleven in 1991.