Fighting off a takeover by a Canadian rival, the Japanese parent company of 7-Eleven announced a major business shake-up on Thursday that included the appointment of its first foreign-born chief executive.
Seven & i Holdings said that Stephen Dacus, 64, a member of the company’s board of directors and longtime retail executive from the United States, would take on the role in May. It also said it planned 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. That company has offered about $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 that 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 doing so would improve the valuation of the sprawling retail group, whose businesses ranged from supermarkets to outlets that sold things like stationery and baby goods.
Seven & i said on Thursday that it had struck a deal to sell some of those peripheral retail businesses to a unit of the private-equity giant Bain Capital for about $5.5 billion. It also said it would aim to buy back more than $13 billion worth of its shares by fiscal year 2030 to help increase their value.
“We are now at a critical inflection point,” Mr. Dacus said at a news conference in Tokyo. With its recent restructuring efforts, he said, Seven & i aimed to pivot from a “general retailer” to a “global convenience store champion” that would focus on bringing Japan-quality food to overseas markets, including the United States.
Seven & i’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, 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, whereas 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. He spoke frequently during Thursday’s news conference about his experience working night shifts at a 7-Eleven, where his father was a franchisee.
Under Mr. Isaka, Seven & i sought to make itself more valuable by moving out of underperforming businesses to focus on 7-Eleven stores 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 about $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 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 and said on Thursday that it was still engaging with the Canadian retailer and considering its 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 in recent months. He had chaired the independent committee evaluating Couche-Tard’s takeover proposal but said on Thursday that he would step away from that role.
