KKR, Bain Engage in Bidding War for Seven & i's Non-Core Assets

In a rare display of public competition, private equity giants KKR & Co. and Bain Capital have engaged in a bidding war for the non-core assets of Japan's Seven & i Holdings, with offers ranging from $4.8 billion to $7.6 billion. This intense rivalry highlights the growing appeal of Japanese assets to foreign investors, driven by market conditions and strategic goals.

The bidding process, which began in late 2024, saw KKR and Bain submit their initial offers in early 2025. KKR offered around 800 billion yen ($4.8 billion), while Bain bid around 1.2 trillion yen ($7.6 billion). Japan Industrial Partners also entered the fray with a bid of around 750 billion yen ($4.8 billion). The competitive nature of the bidding process is evident in the significant premiums offered, with Bain's highest bid representing a 25% premium on Seven & i's market capitalization at the time.



Market conditions, particularly the weak yen and low borrowing costs, have played a significant role in shaping the bid ranges. The weak yen makes Japanese assets more affordable for foreign investors, while low borrowing costs reduce the financing burden for private equity firms. This combination has created an attractive environment for foreign investors to acquire Japanese companies, as seen in the recent surge in private equity activity in Japan.

KKR and Bain's strategic goals and investment philosophies have also influenced their respective bid ranges. KKR, known for its focus on stability and predictability, offered a more conservative bid of around $4.8 billion, reflecting its preference for steady, long-term investments. Bain, on the other hand, is more aggressive in its approach, offering a higher bid of around $7.6 billion, aligning with its strategy of pursuing high-growth opportunities.



The bids from KKR and Bain for Seven & i's non-core assets range from $4.8 billion to $7.6 billion, representing 8.3% to 13.1% of the company's enterprise value and 1.4x to 2.2x its EBITDA. These multiples suggest that the bids are relatively low compared to Seven & i's overall valuation, indicating that the non-core assets may be undervalued or that the bidders are seeking a discount.

The bids from KKR and Bain factor in Seven & i's restructuring plan, which aims to spin off its non-core supermarket, food, specialty store, and other businesses, as well as divest 444 underperforming c-stores in North America. This strategic move allows Seven & i to focus on its core convenience-store business, 7-Eleven. The bids from KKR and Bain suggest that they recognize the potential value of these non-core assets, which include real estate and human capital.

In conclusion, the bidding war between KKR and Bain for Seven & i's non-core assets highlights the growing appeal of Japanese assets to foreign investors, driven by market conditions and strategic goals. The competitive nature of the bidding process is evident in the significant premiums offered, with Bain's highest bid representing a 25% premium on Seven & i's market capitalization at the time. The bids from KKR and Bain factor in Seven & i's restructuring plan, suggesting that they recognize the potential value of the non-core assets. As the bidding process continues, investors will closely monitor the developments, as the outcome could have significant implications for the Japanese market and the global private equity landscape.