Fighting off a takeover by a Canadian rival, the Japanese parent company of 7-Eleven announced a major business shake-up that included the appointment of its first foreign-born chief executive.
Seven & i Holdings said on Thursday that Stephen Dacus, 64, a member of the company’s board of directors and longtime retail executive from the United States, will be its next C.E.O. It also said that it is planning to hold an initial public offering of its U.S. convenience store business, which operates more than 13,000 7-Eleven branches in the country.
The moves are the company’s latest attempt to prevent itself from being acquired by the retail group Alimentation Couche-Tard. The Canadian owner of the Circle K convenience store chain has offered around $47 billion for control of Seven & i, the largest-ever foreign-led bid for a Japanese company.
Japan’s corporate landscape, which in many ways resisted change for decades, is beginning to shift in the face of an influx of attention from foreign investors. The reshuffling at Seven & i, whose convenience stores are so ubiquitous in Japan they are considered part of the national infrastructure, is the latest example of that transformation.
Activist investors have long pushed Seven & i to spin off its 7-Eleven convenience store business, arguing that the move would improve the sprawling retail group’s valuation and deliver benefits to shareholders. Seven & i also said it would plan to buy back more than $13 billion worth of its shares by fiscal year 2030 to help boost their value.
The moves comes as the company’s options for resisting acquisition by Couche-Tard have diminished. Late last month, a bid from Junro Ito, a son of Seven & i’s founder, to take it private fell apart after he failed to secure the necessary funding.
Mr. Ito’s proposal had support from some within the company’s upper ranks who saw it as a way to keep 7-Eleven in Japanese hands. The belief was that a founding-family-led buyout could help preserve a company culture that prioritizes values such as quality and customer experience over what it views as the typical Western focus on shareholder returns and big profits. Couche-Tard has said it would respect and seek to learn from Seven & i’s methods of operation.
When Mr. Dacus steps into his new role in May, he will have to convince shareholders that Seven & i’s new structure and a leadership team led by him and others from the existing management can drive growth without the need for a sale.
Seven & i’s past leaders and its current chief executive, Ryuichi Isaka, have been Japanese executives who rose through the internal ranks. By contrast, Mr. Dacus has held top positions across a number of global brands. Mr. Dacus, who speaks fluent Japanese and English, has also worked for years in Japan’s retail industry, including stints at the parent company of Uniqlo and as chief executive of Walmart Japan.
Under Mr. Isaka, Seven & i sought to make itself more valuable by moving out of underperforming businesses to focus on 7-Eleven stores both in Japan and abroad. In October, the company announced plans to spin off its supermarket division and other peripheral units into a separate holding company. It also set a target of roughly doubling annual sales to around $200 billion by 2030.
However, in recent months, profits from Seven & i’s convenience store business have stagnated in Japan. The situation has been worse in overseas markets like the United States. Over the three months ending in November, operating income from Seven & i’s overseas convenience store business fell by a third from a year earlier.
Before its announcements on Thursday, Seven & i’s shares had fallen more than 6 percent from earlier in the week, when a Japanese media report said the company planned to refuse Couche-Tard’s offer. Seven & i denied the report, saying it was still considering the bid.
Weak growth and mounting pressure from investors to negotiate a deal with Couche-Tard had led Seven & i to increasingly consider Mr. Dacus as a contender for the top job. This was the case even as he headed the independent committee evaluating Couche-Tard’s takeover proposal, according to a person familiar with the matter, who spoke on the condition of anonymity.
