Seven & i Holdings, parent company of 7-Eleven, has signed a non-disclosure agreement with Alimentation Couche-Tard to help progress their potential megamerger, according to announcements from both companies on Thursday.
“The execution of the NDA is a positive step in the constructive engagement process with ACT,” said Seven & i board chair Paul Yonamine.
The NDA will let the two sides share more information, Seven & i’s announcement noted. In a separate announcement, Couche-Tard said the NDA should help the companies “progress transaction discussions, facilitate due diligence, and collaborate on plans to engage with regulators.”
Still, Couche-Tard cautioned that these advancements don’t guarantee a transaction will eventually come together.
This comes several weeks after both retailers began signing NDAs with potential buyers of the roughly 2,000 stores they’ll be expected to divest if the deal is agreed upon. At that time, Couche-Tard President and CEO Alex Miller noted that Couche-Tard had not yet signed an NDA with Seven & i.
The specifics of the new NDA were not disclosed, but Seven & i said it included a “standstill,” which would preclude Couche-Tard, parent company of Circle K, from pursuing a hostile takeover of Seven & i.
In a separate presentation posted to Seven & i’s website on Thursday, the company said its legal advisor met with the Federal Trade Commission on March 27, and the FTC “expressed concern around the transaction.” The report did not specify what those concerns were.
This is the latest step in a saga that began with Couche-Tard announcing a takeover bid for Seven & i last August. Seven & i turned that roughly $39 billion offer down, saying it grossly undervalued the company, and Couche-Tard came back with a modified offer in October.
The talks have moved forward slowly since then, with potential antitrust concerns looming over the discussions. Since 7-Eleven and Circle K are the largest c-store chains in the U.S., any deal would require divesting thousands of stores.
With the failed Kroger/Albertsons deal still fresh in the minds of its top leaders, Seven & i has repeatedly focused on building a strong divestment plan as part of the talks.
“It remains the case that it is critical for the [special committee] to assess if there is a path to a viable divestiture by identifying potential buyers and determining their ability to stand up a real, stand-alone business that will preserve competition and satisfy regulators,” said Yonamine.
