Introduction to Seven & i's Leadership Shift

In a significant move to bolster its corporate value and fend off a substantial takeover bid, Seven & i Holdings Co., the parent company of the global convenience store chain 7-Eleven, has appointed Stephen Dacus as its new CEO. This leadership change comes as the company navigates a $47 billion bid from Alimentation Couche-Tard, a Canadian retail giant. Dacus, who will be the first non-Japanese CEO of Seven & i, faces the challenge of enhancing shareholder value while considering strategic options for the company's future.

Background on Stephen Dacus

Stephen Dacus brings extensive experience in the retail and food industries, having held leadership roles at companies like Mars Inc., Walmart Japan, and the pan-Asian food company Hana Group SAS. His appointment as CEO is part of a broader restructuring plan aimed at focusing on the company's core convenience store business. Dacus has been a member of Seven & i's board since May 2022 and was appointed as the lead independent outside director in April 2024, positioning him well to guide the company through this critical period.

Challenges Ahead for Dacus

Dacus faces several key challenges in his new role:

• Enhancing Shareholder Value: One of the primary tasks for Dacus will be to increase shareholder value. This involves implementing strategies that improve profitability and efficiency across Seven & i's operations, particularly in its convenience store segment.

• Navigating the Takeover Bid: The company is currently evaluating a takeover proposal from Alimentation Couche-Tard. Dacus must decide whether to pursue this option or explore alternative paths to growth, such as the planned IPO of its North American convenience store business.

• Restructuring and Asset Sales: Seven & i plans to sell its non-core businesses, including the Ito-Yokado supermarket chain to Bain Capital, to focus on its core convenience store operations. This strategic move aims to streamline the company and enhance its market position.

Strategic Plans for Growth

Seven & i's strategy under Dacus includes several key initiatives:

• IPO of North American Business: The company plans to list its U.S. convenience store business, known as 7-Eleven, on a major U.S. stock exchange by the second half of 2026. This move is expected to provide greater flexibility and responsiveness to customer needs in the North American market.

• Share Buybacks: Seven & i has committed to buying back shares worth approximately ¥2 trillion (about $13.4 billion) over the next few years. This initiative aims to boost shareholder returns and demonstrate the company's commitment to maximizing shareholder value.

• Focus on Core Business: By divesting non-core assets, Seven & i aims to concentrate on its convenience store operations, which are seen as the most profitable segment of its business.

The Takeover Bid from Alimentation Couche-Tard

Alimentation Couche-Tard's bid for Seven & i is valued at approximately $47 billion, representing a significant premium over the company's current market value. However, the deal faces regulatory hurdles, particularly in the U.S., where antitrust challenges could pose significant obstacles. Seven & i has indicated that it is constructively engaging with Couche-Tard but remains cautious about the potential takeover due to these regulatory concerns.

Conclusion

As Stephen Dacus takes the helm at Seven & i, he faces a complex landscape of challenges and opportunities. His ability to navigate these issues will be crucial in determining the future trajectory of the company. With a focus on enhancing shareholder value, exploring strategic growth options, and addressing the takeover bid, Dacus is poised to play a pivotal role in shaping Seven & i's future in the competitive retail landscape.