Japan’s Seven & i Holdings has formed a strategic partnership with SoftBank Corp, PayPay and Sumitomo Mitsui Card, which will each invest 100 billion yen ($620 million) into the 7-Eleven operator, a filing showed on Friday.
The total 300 billion yen investment comes after the 7-Eleven operator has struggled to turn around its business, having batted away a takeover attempt by Canadian convenience store rival Alimentation Couche-Tard last year.
While Seven & i has carved out and sold off its less profitable business lines to focus on its core convenience stores, stiff competition in Japan and lacklustre results in North America have weighed on its profits.
Each of Softbank, PayPay and Sumitomo Mitsui Card, the credit card arm of Sumitomo Mitsui Financial Group, will acquire a 2.27% stake in Seven & i, the filing showed.
Also on Friday, Seven & i announced a 400 billion yen share buyback, worth over 9% of its outstanding shares.
Deal to bolster domestic business
LY Corp, a SoftBank subsidiary that runs the Line messaging app along with a host of online businesses, also signed the strategic partnership, a release from the companies said.
They aim to integrate their customer information and create a loyalty points ecosystem across Seven & i’s physical stores and the other companies’ online and financial customer bases, the filing said.
The deal will bolster Seven & i’s higher-margin domestic business, but prospects for its larger international operations remain uncertain.
Last week Seven & i aborted a potential stake purchase in Polish convenience store operator Zabka that would have expanded its presence in Europe beyond its strongholds in Japan and the U.S.
It has failed to translate its $21 billion purchase of Speedway petrol stations in the U.S. into higher profitability, which has added to longstanding pressure from shareholders for higher returns.
Since Couche-Tard pulled its 2,600 yen per share buyout offer in July last year, Seven & i’s shares have stagnated. They closed at 2,109 yen on Friday.
Reuters
