Seven & i pursues Zabka stake in defensive expansion push
Seven & i is negotiating a multi-billion-dollar stake in Poland’s Zabka Group to accelerate its European growth, but analysts view the move as an expensive tactic to deter future takeover attempts.
Seven & i shares climbed 3 per cent in Tokyo on Friday after the 7-Eleven owner confirmed it is in negotiations to buy a stake in Zabka Group. The Polish convenience store operator boasts more than 13,000 locations across Poland and Romania.
The Japanese retailer is targeting shares held by Zabka's funds in a deal likely worth several hundred billion yen, or several billion dollars. Warsaw-listed Zabka jumped 11 per cent overnight on the potential transaction.
Defensive Growth
A deal would formally establish Eastern Europe as a new frontier for Seven & i, which already operates outlets in three Nordic countries. CEO Stephen Dacus, who took the helm last year, has publicly positioned Europe as the company's "fourth pillar of growth" following the 2021 acquisition of Speedway petrol stations in the United States.
Beneath the expansion narrative lies an ongoing struggle to satisfy investors frustrated by lacklustre returns. The company has faced intense pressure to streamline its operations and focus strictly on its core convenience store business since fighting off a hostile approach from Canadian rival Alimentation Couche-Tard. That proposed deal would have marked Japan's largest-ever foreign buyout.
To fund its turnaround and block future acquirers, Seven & i is turning to outside capital. Last week, reports emerged that SoftBank Corp, PayPay, and Sumitomo Mitsui Card are in talks to invest several hundred billion yen into the retailer.
Shareholder Scrutiny
Bernstein analysts were highly critical of these partnerships, noting in a client note that they reflect a "history of digital defeat." The firm argued the company is "buying takeover defense with shareholders' money."
The stock's rise on Friday also benefited from a broader sector rotation. "Amid overall market weakness due to falling semiconductor stocks, defensive sectors centered on domestic demand are being bought," said Naoshi Matsumoto, an analyst at Yamawa Securities. Domestic peer Aeon also gained 3 per cent, while memory chipmaker Kioxia tumbled 15 per cent.
Seven & i agreed to sell its supermarkets to private equity firm Bain Capital last year to streamline its portfolio. The Zabka talks represent the next phase of this strategy, testing whether geographic acquisitions can deliver the growth and shareholder value that internal operations have failed to generate.
