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IN TODAY’S EDITION
1️⃣ Will Canada buy 7-Eleven? |
2️⃣ World’s oldest person |
3️⃣ The Intrigue jobs board! |
Hi Intriguer. Now that I’m a dad, my thoughts on real estate have evolved: I’m all about peace, safety, and maybe playgrounds.
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But back when I was at college? Nope, it was all about one thing: proximity to a 7-Eleven. I mean, if you’ve left that art history essay until the last minute because you were playing Halo all week, and then forgot to eat, how else are you supposed to get ramen noodles at 2.15am?
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This is why I slept so well last night, dreaming of a bygone era while knowing that somehow, today’s briefing leads with an update on 7-Eleven.
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You see? This is why you should tell your friends about Intrigue (and earn some sweet perks in the process – see below!).
THE HEADLINES
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US officials fear collapse of ceasefire-hostage talks.
Hamas has now seemingly stated it won’t agree to the deal, while the US has said Israel is on-board, though US officials have reportedly become more frustrated with Israeli leader Benjamin Netanyahu’s “maximalist statements”. Meanwhile, US Secretary of State Blinken has travelled to Egypt and Qatar in an attempt to keep the talks alive, after weeks of relative optimism.
China launches new anti-dumping probe into EU dairy.
Beijing has hit back at the EU by announcing a fresh investigation into some European dairy imports, a day after the EU announced its draft decision to proceed with tariffs on China-made EVs, which it found benefit “heavily from unfair subsidies”. China’s officials claim Beijing’s dairy inquiry was merely sparked by domestic producers complaining about European subsidies.
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Ukraine targets Moscow with drones.
Russia says it’s shot down at least 11 drones during one of the biggest Ukrainian counter-attacks on the Russian capital. No damages or casualties were reported. Meanwhile, Russian President Vladimir Putin has made a surprise trip to Chechnya for the first time in 13 years.
The Obamas take the stage at the DNC.
The Democratic National Convention’s second night included addresses by former president Barack Obama, former first lady Michelle Obama, and JFK’s grandson Jack Schlossberg. Btw – our very own John and Kristen are there on the ground in Chicago, so don’t miss their weekly Election Intrigue briefing on what these elections mean for the world (and vice versa).
TOP STORY
Trillions to buy out Japan’s 7-Eleven owner?
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And here you were, assuming 7-Eleven was simply the place to get that 2am rubbery hotdog and balance it out with a fresh diet coke.
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Seven & i Holdings, the Japanese owner of the 7-Eleven convenience store chain, has just received a rare takeover bid that’s piqued the world’s attention.
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The first 7-Eleven opened in Dallas in 1927 as the ‘Southland Ice Company’. As it diversified out of ice (seriously), it changed its name before settling on ‘7-Eleven’ to tout its new longer hours, which were presumably a big deal at the time.
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Today the chain has grown way beyond Texas, with 85,000 stores globally. That’s more than McDonald’s or Starbucks. Almost a third of them are in Japan alone.
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Who cares? We love a quality Slurpee and day-old donut as much as the next sleep-deprived diplomat, but there’s more at play here.
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The non-binding offer submitted by Canadian convenience store giant Couche-Tard (which owns Circle-K) could point to a new era for Japan’s economy.
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Here’s why. Couche-Tard made its offer public on Monday and, while key details – including the basic structure and price – are still secret, it could go way beyond its ¥5.6T ($38B) market valuation at the time the news broke.
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That’d easily make this the largest foreign takeover of a Japanese company in history. But this obscures the bigger point here: foreign takeovers in Japan are rarer than fresh food at a 7-Eleven (okay, Japan’s convenience stores – or konbini – are famed for their fresh food, and that approach is headed for the US).
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For decades, it’s been the opposite: Japanese firms and conglomerates have long criss-crossed the globe to do the buying rather than be bought.
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Why?
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Flat growth – Facing ‘lost decades’ after a spectacular asset bubble popped in the 1990s, Japan’s cashed-up companies ventured abroad for growth
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Easy finance – These same firms have had a little help bank-rolling their spending sprees, with rates at home below 1% since 1995, and
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Cautious execs – Japan’s managers (backed by some protectionist vibes out of Tokyo) haven’t shown much interest in selling, instead prioritising stability over shareholder value.
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That’s partly why Seven & i just bought America’s Speedway and Sunoco chains. But all of the above factors (and more) have shown some movement lately:
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After years of gradual reform and loose monetary policy, we’ve finally seen wages growth and even inflation pick up
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Against that backdrop, the Bank of Japan has finally lifted rates, though they’re still low
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Authorities also passed meaningful corporate reforms last year pushing executives to re-think capital allocation and shareholder interests, and
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The yen is at record lows, making it cheaper for foreign firms to snap up companies in Japan (while making the vice-versa more expensive)
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Now, to be clear, Japan still has some major structural challenges (who doesn’t), like an ageing and shrinking population. But the Canadians crunched all the data – plus a 20% slump in Seven & i stock since February, on weak overseas earnings – and decided to make a move.
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And in doing so, they’ve sent another signal that Japan may just be changing.
INTRIGUE’S TAKE
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This deal won’t be easy. It’ll face antitrust scrutiny in both Japan and the US, lest some new monopoly emerge and start jacking up Slurpee prices on us. And 7-Elevens are part of the fabric in Japan, so we might see political resistance to a foreign sale.
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Plus… anyone who’s done business there will have heard of ‘nemawashi’. It translates literally as ‘turning the roots’, and referred originally to the prep work for transplanting a tree: spend more time loosening those roots, and you boost the chances the tree will thrive in its new home.
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In a corporate context, it’s all about the (very time-consuming) informal process required to get everyone on-board for a proposed business change.
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And yet… there’s reason to believe Couche-Tard has been doing its nemawashi for a while now – it reportedly first approached Seven & i back in 2020. So if the roots are now loosened, and if the price is right, Seven & i’s board might have a tough time saying no.
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And that’d mean a big shake-up for Japan.
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Also worth noting:
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Japan’s Seven & i Holdings came into existence in 2005, following a restructure of various sister firms (including Denny’s Japan!).
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The ‘i’ in its name is a nod to Masatoshi Ito, who died in 2023 aged 98. He’s often credited with transforming 7-Eleven into a global empire, after his company first bought a 70% stake in 1991.
MEANWHILE, ELSEWHERE…
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🇲🇳 Mongolia: Mongolia has left a proposed natural gas pipeline between Russia and China (via Mongolia) off its long-term plan, casting doubt on what would’ve been a financial lifeline for Moscow. The talks have faced China-Russia pricing and control disputes, plus concerns over secondary US sanctions on anyone financing Russia’s war.
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🇪🇸 Spain: The world’s oldest person, Maria Branyas Morera from Catalonia, has passed away at the age of 117, according to a family announcement on her Twitter account. According to the US-based Gerontology Research Group, that means the world’s oldest person is now Japan’s Tomiko Itooka, at a spritely 116.
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🇫🇯 Fiji: Prime Minister Rabuka has met China’s Xi Jinping in Beijing, wrapping up a ten-day tour of China that’s featured several Chinese trade and investment pledges. Rabuka has nudged Fiji closer to the West since returning to power in 2022.
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🇺🇸 US: In a rare joint statement, three US intelligence agencies have said Iran is taking steps to “stoke discord and undermine confidence in our democratic institutions”, including the attempted hacking of both major party campaigns. Iran has denied the allegations, which claim the regime “perceives this year’s elections to be particularly consequential“.
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🇸🇦 Saudi Arabia: A new BBC documentary has alleged the kingdom’s crown prince (‘MBS’) forged his ailing father King Salman’s signature to deploy ground troops to Yemen from 2015. MBS, at the time minister of defence, was the primary Saudi driver behind the fraught intervention.
EXTRA INTRIGUE
We’ve rounded up some jobs we thought you might like!
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Assistant VP – Global Markets @ Barclays in London
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Analyst – Finance @ Disney in Buenos Aires
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Associate – Banker @ EBRD in Ulaanbaatar
GRAPHIC OF THE DAY
Credits: The Economist.
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Urban planners were once worried about sprawling cities, but now their concerns have a different… direction.
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Global mega-cities seem to be growing upwards rather than outwards, according to a study published in Nature Cities. This skyward push has both upsides and downsides: tall cities tend to be greener (fewer emissions per person) and have better access to public services, but they’re also denser and less equal.
DAILY POLL
What do you think this proposed buyout of 7-Eleven means? |
Yesterday’s poll: Where do you land on this Musk vs Moraes feud?
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🟩🟩🟩🟩🟩🟩 ⚖️ Regulations are there to protect us all (58%)
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🟨🟨🟨⬜️⬜️⬜️ 🐦 Free speech is sacrosanct (37%)
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⬜️⬜️⬜️⬜️⬜️⬜️ ✍️ Other (write in!) (5%)
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Your two cents:
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⚖️ P.K: “It is becoming imperative that social media be regulated. Hate speech abounds. Children/teenagers are becoming bolder with their online bullying.”
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🐦 D.L: “The right balance must be struck, but until we resolve the ‘who will regulate the regulators’ question, we should lean toward free speech.”
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✍️ H: “While we in the US hold free speech near and dear… what gives Musk and us the right to dictate to other countries what they will do? If you have an office and want to do business in Brazil then you will abide by their laws, regardless of how you feel about it.”
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⚖️ Z.R: “It’s not really free speech when tech companies choose what we see based on their algorithms.”
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