This year's largest global merger and acquisition deal fell through: Seven & i refused to discuss leading to a Canadian company abandoning the purchase, causing investment banks to miss out on hundreds of millions in commission.

Convenience store giant Alimentation Couche-Tard Inc. from Canada has announced the termination of its acquisition of Japan's Seven & i Holdings Co., causing significant losses for international investment banks such as Goldman Sachs Group, Inc. and Morgan Stanley. The deal, which was expected to become the largest global merger and acquisition case in 2025, fell apart due to the breakdown of long-term negotiations between the two parties. In this deal, Goldman Sachs Group, Inc. served as Couche-Tard's financial advisor, providing advisory services for its 6.77 trillion yen (approximately $46 billion) acquisition offer; Morgan Stanley partnered with Japan's Mitsubishi UFJ Financial Group, Inc. Sponsored ADR to advise Seven & i, with institutions such as Nomura Holdings, Inc. Sponsored ADR deeply involved in the transaction. Investment banks typically charge a "success fee" for their services, meaning they only receive fees for advisory and debt financing arrangements after the transaction is completed. After nearly a year of negotiations, Couche-Tard abandoned the acquisition citing "the other party's refusal to engage in meaningful negotiations." If successful, this would have been a historic case of foreign acquisition of a Japanese company. It is estimated that the parties involved may have initially shared tens of millions to hundreds of millions of dollars in commission income. Following the announcement, Seven & i's stock price plummeted by 9.16% in the Tokyo market, marking the largest single-day drop in three months. The company responded by expressing "deep regret" over the acquirer's decision, but emphasized its commitment to continuing its independent operational strategy, aiming to achieve approximately 2 trillion yen in shareholder returns by the end of the 2030 fiscal year through stock buybacks, introducing strategic partners, and an IPO for its North American convenience store business. The fallout of this failed deal extends beyond the financial sector. Bloomberg industry research points out that Japanese trading company Mitsui & Co. missed the opportunity to sell its 2% stake in Seven & i for around $1 billion, while Seven & i's subsidiary Seven Bank planned to sell a 10% stake to Itochu Corp for 30 billion yen (approximately $208 million), highlighting its strategic shift towards focusing on its core convenience store business. According to London Stock Exchange Group (LSEG) data, the transaction volume in the Japanese M&A market in the first half of 2025 reached $232 billion, more than double from the previous year, driving the total value of Asian M&A deals to $650 billion. This trend is fueled by Japan's government-led corporate governance reforms. In January 2025, the Ministry of Economy, Trade and Industry revised the Companies Act, requiring companies to improve profitability and optimize shareholder participation mechanisms, while the low interest rate environment further stimulates the activity of foreign investment and private equity. Amid the current M&A frenzy in Japan, companies like Toyota and NTT are pushing for privatization of their listed subsidiaries, while private equity funds are actively taking over non-core assets. Institutions such as Morgan Stanley are expanding their business by establishing specialized financing departments, introducing elite traders, and Goldman Sachs Group, Inc. is also strengthening its team in Japan. Bankers predict that government reforms and the long-term trend of Japanese companies seeking overseas growth will support the momentum of this mature market's transactions, with commission income being crucial to the profitability of investment banks in the Asia-Pacific region. Despite increased global economic uncertainty and the difficulty of valuation negotiations, Japan's relative stability is still seen as an important direction for global capital deployment.