SEVEN & I CLASSIFIED AS CORE TO JAPAN’S NATIONAL SECURITY

The new classification comes after a request to the Japanese government.

Japanese retailer Seven & i Holdings has been classified as core to the country’s national security, according to an updated finance ministry list released today, Reuters reported.

The retailer requested the designation last month, saying that “its convenience stores play a critical role in supplying food and supplies in the event of natural disasters.

They also provide municipal services, allowing residents to obtain official documents,” reported Bloomberg.

The request coincided with Alimentation Couche-Tard’s $38.5 billion buyout offer, which Seven & i has since rejected, saying it was open to further dialogue regarding the offer price.

“The classification has raised questions as to whether it is a defensive maneuver,” to hinder the takeover, as core companies require the Japanese Ministry of Finance to vet any share purchases from foreign entities over 10% as a matter of national security, Reuters reported.

However, Reuters said that Seven & i’s new status doesn’t necessarily raise any additional hurdles to a potential Couche-Tard takeover.

In cases where a full buyout is sought, “a review is mandatory for companies like Seven & I, which are considered significant to Japan’s economy or security, regardless of whether they are categorized as core or non-core.”

The classification does not change the level of government scrutiny or the review process for any bid to acquire an entire company, a ministry official said.

Seven & i said its classification is not related to Couche-Tard’s buyout proposal.

Reuters said that Seven & i was among 88 companies newly added to the list, which generally spans sectors such as nuclear power, space and semiconductors.

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