Japanese retail giant Seven & i Holdings has been classified as 'core' to national security, according to an updated finance ministry list released on 13 September.
The classification has raised questions as to whether it is a defensive manoeuvre by the owner of 7-Eleven convenience stores which last week rejected a $38.5 billion (€34.65 billion) buyout offer from Canada's Alimentation Couche-Tard.
Couche-Tard is discussing whether to raise its offer price, according to a Bloomberg report.
However, Seven & i's new status doesn't necessarily raise any additional hurdles to a potential Couche-Tard takeover.
When a company is categorised as core, foreign entities seeking to buy a stake of 1% or more in a Japanese firm must in principle file for a national security review with the Japanese government.
Mandatory Review
But 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 categorised 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 was not related to Couche-Tard's buyout proposal.
The ministry's classification list is based on responses from all listed companies to its surveys and is updated almost every year.
Seven & i was among 88 companies newly added to the list, which generally spans sectors such as nuclear power, space and semiconductors.
Seven & i
While convenience stores, Seven & i's mainstay business, would not count as a sector that would require a national security review, the group has wide-ranging businesses, including financial services as well as security services for commercial facilities.
Seven & i said last week Couche-Tard's offer was not in the best interests of its shareholders and could face antitrust challenges in the US, where the combined company would be the biggest convenience store operator by a considerable margin.
US antitrust regulators have told Seven & i that they may probe a potential deal with Couche-Tard, sources have said.
Sources have also said the Japanese company has tapped Nomura to advise the company's special committee about a potential takeover by Couche-Tard. Seven & i and Nomura declined to comment.
