Seven & i rises on report of talks to buy Zabka stake

Seven & i Holdings shares climbed more than 4% in early Tokyo trading Friday after Nikkei reported that the 7-Eleven parent is close to buying a stake in Poland’s Zabka Group. For retail investors, the move puts a spotlight on Seven & i’s push to grow outside Japan and add more convenience-store exposure in Europe.

A stake purchase means Seven & i would buy part of Zabka rather than take over the whole company. Nikkei reported that the possible deal could be valued at several hundred billion yen, a sign that Seven & i may be willing to spend heavily to expand its store network beyond its core markets.

Zabka is a major convenience-store operator in Poland. According to Nikkei, the company was founded in 1998 and operates more than 10,000 franchise stores selling groceries and hot snacks. A franchise model means stores are run by local operators under the company’s brand and system, which can help a retailer expand faster without directly operating every location.

Zabka’s Warsaw-listed shares also moved sharply after the report. CNBC reported that the stock closed 10.9% higher Thursday, reaching a record high.

Why Seven & i is looking abroad

Seven & i has been trying to build a larger global convenience-store business. Nikkei reported that the company aims to raise its worldwide store count, including Japan, from 87,000 to 100,000 by 2030.

That target matters because convenience chains tend to benefit from scale. More stores can give a retailer stronger purchasing power with suppliers, broader brand reach and more ways to roll out services across markets. The trade-off is that international expansion can bring new costs, local competition and execution risk.

Nikkei reported that Seven & i expects an investment in Zabka to strengthen its European retail network. The deal would also give Seven & i a foothold in Eastern Europe, where Zabka already has a large store base in Poland.

A rare major overseas investment

If completed, the transaction would be Seven & i’s first major investment in a foreign convenience-store operator in five years, according to CNBC. The company’s last major overseas move was its $21 billion purchase of U.S. chain Speedway in 2021.

That history is relevant for investors watching Seven & i’s capital allocation, which is how a company chooses to use its cash. A multibillion-yen investment can support growth, but it can also raise questions about returns, integration and management focus.

Seven & i and Zabka did not immediately respond to CNBC’s requests for comment. The companies have not announced a finalized transaction.

This story draws on original reporting from CNBC.