KDDI’s recent TOB (Tender Offer) for Lawson and NTT Docomo’s collaboration with Family Mart reveal that mobile carriers’ desire to expand their businesses by collaborating with convenience store chains.

1. KDDI

KDDI plans to purchase all the shares of Lawson that are not owned by Mitsubishi, its parent company, and take it private in a deal worth about JPY 500 billion ($3.4 billion) This would make KDD and Mitsubishi, Lawson’s parent company, equal owners of Lawson, the third-largest convenience store chain in Japan.

The TOB is part of KDD’s strategy to leverage Lawson’s network of about 14,600 stores nationwide to promote its banking, insurance, and smartphone support services, as well as to create a digital economy zone by combining points and financial services.

Lawson, on the other hand, hopes to benefit from KDD’s telecommunications and digital technologies to enhance its online shopping, delivery, and unmanned store services.

In terms of retail media, the TOB would enable KDD and Lawson to offer more advertising opportunities and services to brands that want to reach their customers at or near the point of purchase, both on-site and off-site For example, KDD could use Lawson’s first-party data to target shoppers with relevant ads on its own website, app, or other channels, while Lawson could use KDD’s digital platforms to display ads and videos on its website, app, or in-store screens. The TOB would also allow KDD and Lawson to compete more effectively with other retail media networks, such as Amazon, Walmart, and Rakuten.

2. NTT Docomo

Docomo does not own any shares of Family Mart, but has a business alliance with Itochu, its parent company, and CyberAgent, an internet advertising firm, to establish a new company called Data One. NTT Docomo aims to use the purchase data of Family Mart and other retailers, as well as its own POINT CLUB member data, to develop and sell advertisement that tracks product purchases on an individual ID basis.

NTT Docomo will also develop and roll out new advertising products utilizing the owned media (apps, etc.) point services and others maintained by Family Mart and NTT Docomo, maximizing the effects of marketing activities for brands.

Both mobile carriers are trying to create new economic zones and customer data platforms by combining their telecom and digital services with the convenience store industry. This strategic move is expected to significantly enhance the value of CVS’s brick-and-mortar footprint

My regrets: KDDI’s president stated that they had tested out the relationship with Lawson for a while through their approximately 3% ownership before deciding on the tender offer to buy (TOB). The average TOB premium is around 30%, so it may be worthwhile to pay closer attention to shareholder profiles. This is especially relevant these days, as the Tokyo Stock Exchange is focused on improving the quality of its listed companies. Weaker players may be encouraged to strengthen their position or consider selling themselves.