Global asset manager Fortress Investment Group has acquired Sogo & Seibu, Japan’s third-largest department store operator, for $1.5 billion, the deal’s financial advisor said.
Fortress acquired Sogo & Seibu from Seven & i Holdings Co Ltd, the Tokyo-headquartered owner of global convenience store chain 7-Eleven, according to an announcement released by Houlihan Lokey.
Sogo & Seibu, which operates 10 stores situated in prime locations across Japan, was founded in 1969. It was acquired by Seven & i in 2006. The latest acquisition marks the largest transaction in the Japanese retail sector since 2021, per the announcement.
The sale also comes as workers at Sogo & Seibu’s flagship department store in Tokyo went on strike in August, marking the first strike for a Japanese department store in six decades. The strike, according to a Nikkei report, temporarily shut down the store.
Sogo & Seibu offers a wide range of consumer goods and services from high-end merchandise to daily necessities. Following the acquisition, Fortress will revamp the operations of Sogo & Seibu department stores in major cities across Japan.
The plans include renovating flagship stores, including Seibu Ikebukuro which is located adjacent to Ikebukuro Station. For Seven & i, divesting the department store operator will allow it to further grow its convenience store business.
Seven & i, originally founded in 1920 as general merchandise chain Ito-Yokado, operates approximately 85,000 stores in nearly 20 countries and territories worldwide. It acquired majority control of 7-Eleven in 1991 and Speedway, a US gas station and convenience store chain, in 2020.
In April, additional shareholders of Seven & i pushed the company to spin off its 7-Eleven convenience store chain and have new directors on the board. The move comes months after US investment firm ValueAct proposed a tax-free spin-off of 7-Eleven via a listing on the Tokyo Stock Exchange.
Fortress, on the other hand, manages approximately $44.7 billion of assets as of June 30, 2023. In May, Fortress and Mubadala Investment Co agreed to buy 90% of the equity held by SoftBank in the US asset manager. The deal will give Mubadala Capital 70% of Fortress, while the Fortress management team will own 30%.