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Japan’s second-biggest mobile carrier KDDI has launched a $3.3bn tender offer for joint control of the Lawson convenience store chain, betting that an ageing population and deepening labour shortages will bring fundamental change in the way the nation shops.
KDDI’s offer is among the largest domestic takeover bids to identify Japan’s demographics as a central driver for a deal. It comes amid predictions from mergers and acquisitions bankers that the country’s shrinking and greying population will increasingly push corporate Japan into an era of rapid consolidation.
The telecoms group expects convenience stores to become more important to ageing shoppers as a falling population hollows out the regional retail sector.
KDDI said it would help Lawson to push into ecommerce and envisaged the stores becoming places where a less mobile elderly population could receive online medical consultations and other services.
“As the population is expected to decline and the ageing of the population with fewer children is expected to accelerate, we believe that the role of bricks and mortar convenience stores . . . as regional infrastructure will continue to grow,” said KDDI in a statement, adding that it needed to increase the use of digital technology to offset labour shortages.
KDDI wants to team up with the Mitsubishi trading house, which owns half of Lawson, to assume joint control of its network of 14,600 stores and take the group private. KDDI already owns 2 per cent of Lawson and is offering to buy out other shareholders at a 16 per cent premium to Lawson’s closing share price on Tuesday.
Lawson, which is the third largest of Japan’s convenience store chains by number of outlets after Seven & i Holdings and FamilyMart, has agreed to the offer. It closed on Tuesday with a market capitalisation of ¥894bn ($6bn).
Japan’s trio of convenience store groups have fought each other on multiple fronts, with each increasing and improving their offerings of coffee, fast food, pre-prepared meals, drugs and exclusive goods.
Analysts have described an “arms race” between the three over the fried chicken sold from behind the counters.
At the same time, the three have battled for supremacy in technology, as each has introduced more labour-saving automation and attempted to lock customer loyalty in through point schemes and other strategies.
