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A $39 billion takeover attempt by Canada’s Alimentation Couche-Tard for the owner of 7-Eleven is being seen as a turning point for Japan’s corporate governance, and it has left executives worried their own companies might soon face similar bids. The CEO of Suntory Holdings, Takeshi Niinami, shared this perspective.
In response to the rejected offer from Couche-Tard, Seven & i Holdings has shown that Japanese companies are now evaluating foreign bids with a focus on value rather than simply dismissing them outright, according to Niinami. He remarked that Seven & i’s decision demonstrated progress in Japan’s corporate governance.
However, this bold bid has heightened concerns among Japanese CEOs. Niinami suggested that many executives are now anxious, fearing that their companies could be the next target of foreign takeovers. He emphasized that Japan’s economic reforms and a shift toward better returns on equity, coupled with the pressure of a weakened yen, are driving this new focus on creating value or risk being acquired.
Niinami, a prominent figure in Japan’s business world and an economic advisor to multiple prime ministers highlighted that the changing landscape is also making foreign acquisitions a popular topic. Japan’s outbound deal value is at a 17-year high in 2024 despite the challenges posed by a historically weak yen. One of the most controversial recent deals involves Nippon Steel’s attempt to acquire U.S. Steel, which has faced political resistance in the U.S. ahead of the upcoming presidential election. Niinami stated that this opposition is more political than economic, maintaining that the deal would benefit both U.S. Steel and the U.S. economy.
Looking at Suntory’s future, Niinami indicated that the company remains keen on expanding its portfolio through acquisitions, potentially eyeing deals in the $10 billion range, although no immediate targets are on the horizon.
On Japan’s broader economic outlook, Niinami praised the central bank’s approach to normalizing monetary policy and suggested that interest rates could rise to 1% within the next six to nine months. He emphasized the need for sustainable wage growth to drive consumer demand, noting that Japan is regaining its economic momentum after two decades of deflation, but added that careful steps must be taken to maintain this upward trend.
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