(July 31): SoftBank Corp, PayPay Corp and Sumitomo Mitsui Financial Group Inc (SMFG) will invest around ¥300 billion (RM7.7 billion) to buy a stake in Seven & i Holdings Co, uniting Japan’s biggest convenience store operator with an influential chunk of the country’s banking and payment sector to drive more customer traffic. 

The new partners will invest equally in Seven & i by each acquiring roughly ¥100 billion worth of Seven & i in a private placement of stock held by the company, they said in a statement on Friday. That translates into about 2.3% ownership apiece, after accounting for a separately arranged ¥400 billion share buyback by the company.

Seven & i, which has been pushing ahead with a turnaround plan, will gain deep-pocketed partners to help fend off activist shareholders or unwanted suitors. The alliance is aimed at helping the companies compete against other retail-payment alliances in the country that are seeking to capture consumers’ wallets. The goal is to make 7-Eleven the “first choice” for customers, the new alliance said in the statement. 

Before news of the talks emerged earlier this month, Seven & i’s stock had been trading near levels last seen in 2024, when Circle K operator Alimentation Couche-Tard Inc made an unsolicited, and ultimately unsuccessful, takeover proposal for the company. Chief executive officer Stephen Dacus has been working to turn around the Tokyo-based retailer, which underwent a restructuring following Couche-Tard’s ¥6.77 trillion pursuit that was abandoned a year ago. 

Seven & i operates its own payments and loyalty programme, which could potentially be combined with PayPay’s 74 million users. The goal is to also bring more people into the roughly 22,000 7-Eleven stores across Japan. PayPay, owned by SoftBank, competes against digital-payments and loyalty points networks operated by Rakuten Group Inc and NTT Docomo Inc. 

SoftBank has AI tools under development that can automate store operations. Founder Masayoshi Son is seeking to expand the company’s role in the deployment of AI services and infrastructure around the world. PayPay debuted on the Nasdaq in March.

PayPay’s scale offers Seven & i a way to sharpen promotions using purchasing data, personalise offers and steer customers towards 7-Eleven more frequently. PayPay is also within the same ecosystem as the LINE messenger network, which has 100 million monthly users in Japan, potentially giving the alliance access to one of the country’s broadest consumer-data pools.

SMFG adds another layer through its credit-card business, V Point loyalty programme and Olive digital-banking platform, which combines bank accounts, payments, securities and insurance in a single app. That could let them offer services ranging from targeted discounts and consumer credit to banking products, while turning 7-Eleven’s nationwide store network into a physical gateway for acquiring customers.

The partnership also marks a shift in Seven & i’s approach to financial services. The retailer has reduced its holding in former subsidiary Seven Bank Ltd to 39.9% as part of an effort to simplify the group and concentrate resources on convenience stores. Yet its shops remain home to much of Seven Bank’s network of more than 28,000 ATMs, giving the new partners a dense collection of locations to tap into digital payments, banking and retail services.

For Seven & i, the challenge will be translating the new financial alliance into higher sales rather than simply adding another layer of technology. Dacus has made improving food, digital engagement and store operations central to the company’s revival, but progress in its North American business has been slow enough to delay a planned initial public offering. 

Uploaded by Evelyn Chan