Japanese retail giant Seven & i Holdings (3382.T), opens new tab has been classified as “core” to national security, according to an updated finance ministry list released on Friday.
The classification has raised questions as to whether it is a defensive manoeuvre by the owner of 7-Eleven convenience stores which last week rejected a $38.5 billion buyout offer from Canada’s Alimentation Couche-Tard (ATD.TO), opens new tab. Couche-Tard is discussing whether to raise its offer price, according to a Bloomberg report.
However, Seven & i’s new status doesn’t necessarily raise any additional hurdles to a potential Couche-Tard takeover.
When a company is categorised as core, foreign entities seeking to buy a stake of 1% or more in a Japanese firm must in principle file for a national security review with the Japanese government.
But in cases where a full buyout is sought, a review is mandatory for companies like Seven & i which are considered significant to Japan’s economy or security regardless of whether they are categorised as core or non-core.
The classification does not change the level of government scrutiny or the review process for any bid to acquire an entire company, a ministry official said.
Seven & i said its classification was not related to Couche-Tard’s buyout proposal.
The ministry’s classification list is based on responses from all listed companies to its surveys and is updated almost every year.
Seven & i was among 88 companies newly added to the list, which generally spans sectors such as nuclear power, space and semiconductors.