Couche-Tard gets the last laugh on Seven & i

Zabka SA

31/07/2026 16:20

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.
By Yawen Chen
LONDON, July 31 (Reuters Breakingviews) - When Canada's Alimentation Couche-Tard ATD.TO walked away from a $46 billion takeover approach for Seven and i 3382.T last year, its Japanese target argued it could generate more value by remaining independent. Couche-Tard's agreement to buy Zabka ZAB.WA on Friday allows it to move on, while making it harder for its erstwhile sparring partner to do so.
The $60 billion Circle K owner's $9 billion bid for the Polish convenience store retailer comes soon after Seven & i explored buying a minority stake in the same company. The feeding frenzy is easy to understand. Zabka is one of Europe's fastest-growing convenience retailers, with Visible Alpha forecasting revenue growth of around 12% to 14% annually through 2029 while maintaining operating margins of roughly 8%. Couche-Tard has instead secured the whole business.
Still, Couche-Tard Executive Chairman Alain Bouchard doesn't appear to be overpaying. His bid represents an enterprise value of roughly 41 billion zlotys ($11 billion) including debt, representing only a 9% premium to Zabka's undisturbed market value. By 2029, analysts expect Zabka to generate around 3.5 billion zlotys of operating profit, according to Visible Alpha.
Adding the Canadian group's targeted annual synergies of 945 million zlotys ($250 million) and assuming an 18% tax rate implies a return on invested capital of roughly 9%, according to Breakingviews calculations. That's around Zabka's weighted average cost of capital, analyst Janusz Pieta at Poland's mBank told Breakingviews. True, some of these synergies rely on higher revenue rather than lower costs. But Zabka, which only listed in 2024, has a sophisticated technology platform, and supply chain and logistics capabilities that Couche-Tard hopes to deploy more widely across its European network.
With only a minority stake, Seven & i boss Stephen Dacus might have struggled to do the same. But his Polish miss comes as a planned listing of its North American business has been delayed, the turnaround there has progressed more slowly than hoped, and the company's shares remain well below Couche-Tard's 2,600-yen-a-share offer. Analysts expect Seven & i to deliver little more than flat revenue growth through 2029, with operating margins hovering around 4%, Visible Alpha data show. Couche-Tard's growth profile, by contrast, should receive a boost.
Buying Zabka does not prove Dacus should have accepted Bouchard's offer. It does, however, allow Couche-Tard to combine a potentially value-enhancing deal with a modicum of revenge. That should take the sting out of last year's disappointment.
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CONTEXT NEWS
Canadian retailer Alimentation Couche-Tard said on July 31 it plans to buy Poland's ‌Zabka for $8.7 billion, marking its largest acquisition and expanding its presence in Central and Eastern Europe after abandoning a $46 billion bid for Japan's Seven & i last year.
Couche-Tard said it had secured commitments from shareholders including CVC Capital and Partners Group ⁠to tender their shares, giving it the backing of investors representing about 57% of Zabka's share capital.
The company launched a voluntary tender offer at 32 zlotys per share, a premium of about 9.4% to Zabka's closing price on July 30, valuing the Polish convenience-store operator at about 32.6 billion zlotys ($8.72 billion).
In a joint statement, Couche-Tard said the acquisition would provide a significant platform in Central and Eastern Europe and ‌identified ⁠annual synergies of about $250 million within three years.
The deal is expected to close by December 2026.

(Editing by George Hay; Production by Oliver Taslic)
((For previous columns by the author, Reuters customers can click on CHEN/yawen.chen@thomsonreuters.com))