Wall Street Banks Miss Out on Millions in Fees as Seven & i Deal Collapses

A 7-Eleven convenience store in Tokyo. Photo by Kiyoshi Ota /Bloomberg

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(Bloomberg) — Wall Street banks from Goldman Sachs Group Inc. to Morgan Stanley are missing out on millions of dollars in fees after Canada’s Alimentation Couche-Tard Inc. abandoned its bid to buy Seven & i Holdings Co., in what could’ve been one of the world’s biggest deals this year.

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Goldman has been advising Couche-Tard on its ¥6.77 trillion ($46 billion) offer, while Morgan Stanley — which counts Mitsubishi UFJ Financial Group Inc. as a key partner in Japan — is Seven & i’s adviser. Others working on the deal or trying to get a role include Nomura Holdings Inc. 

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Investment banks typically get paid once a transaction is completed, unlike other advisers such as lawyers, who tend to work on an hourly rate. 

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After an almost yearlong pursuit of Seven & i, Couche-Tard has abandoned the effort, saying the Japanese operator of 7-Eleven convenience stores had refused meaningful engagement. The deal was set to be the largest-ever foreign takeover of a Japanese company. 

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Banks on the deal stood to earn tens, if not hundreds, of millions of dollars from fees, including those related to advisory and debt financing. 

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Seven & i shares plunged as much as 9.6% in Tokyo on Thursday, the biggest intraday decline in more than three months. The company said it was disappointed by Couche-Tard’s decision, adding that it remains committed to its standalone value creation plan and to improving its operations.

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There’s been a surge in dealmaking in Japan by companies and private equity funds amid a push to improve governance and shareholder returns. That’s led to a talent war as banks ramp up their presence in the country by hiring elite dealmakers, raising headcount and launching specialized financing units.

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The volume of mergers and acquisitions involving Japanese companies has reached $137 billion this year, an almost 170% surge from the same period in 2024, according to data compiled by Bloomberg. For investment banks, mature markets like Japan are critical for profitability in the Asia-Pacific region because they are likely to earn higher fees than in developing countries.

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The collapsed deal is also having an impact beyond investment banking. Mitsui & Co. lost a chance to pocket around $1 billion for its 2% stake in Seven & i, Bloomberg Intelligence analyst Andrew Chan wrote in a note Thursday.

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