Alimentation Couche-Tard, a major convenience store operator based in Canada, has expressed interest in acquiring the Japanese parent company of 7-Eleven, as confirmed on Monday by both parties.

In a press release, Couche-Tard announced it had “recently submitted a friendly, non-binding proposal” to Seven & i Holdings and that they are “committed to achieving a mutually beneficial deal that serves the interests of both companies’ customers, employees, franchisees, and shareholders.”

Seven & i Holdings, known for operating over 80,000 7-Eleven stores globally, acknowledged receiving the proposal and stated that its board of directors has set up a “special committee” to evaluate it.

The company further mentioned it plans to undertake a “prompt, thorough, and detailed” examination of the proposal before responding to Couche-Tard. The financial specifics of the offer were not disclosed by either party.

Couche-Tard operates close to 17,000 stores across 31 countries and territories, making it “one of the largest independent convenience store operators in the United States,” where it operates primarily under the Circle K brand.

7-Eleven could be the largest Japanese target for a foreign acquisition

This potential acquisition would position Seven & i Holdings as the largest-ever Japanese target for a foreign takeover, as reported by Reuters on Monday.

According to the news source, 7-Eleven stores in Japan are more akin to smaller supermarkets and often stock toiletries and clothing, unlike some U.S. convenience store formats.

Following this news, shares of Seven & i rallied nearly 23% in Tokyo, increasing the retailer’s market value to approximately 5.6 trillion yen or about $38 billion. On the other hand, Couche-Tard’s valuation stands at around $58 billion.

Contributing: Makiko Yamazaki, Kane Wu, and Anton Bridge, Reuters