Japan's Seven & i, which operates the 7-Eleven chain, is mulling a takeover by Canada's Alimentation Couche-Tard, owner of the Circle K convenience store brand.

The deal, if completed, would be the biggest takeover by a foreign company targeting a Japanese firm.

Seven & i said Monday it has set up a special committee of independent outside directors to consider the offer. It said it would "conduct a prompt, careful and comprehensive review of the proposal."

Seven & i Shares Soar on News

The news sent Seven & i shares surging in Tokyo trading, closing about 23% higher. Seven & i closed trading Friday with a market capౠ of roughly $31 bil🦹lion, before the potential deal was disclosed.

The largest acquisition targeting a Japanese firm at present is the up to $22 billion deal that drugmaker Merck & Co. (MRK) struck last year for rights to jointly develop and commercialize three of Daiichi Sankyo's candidate cancer drugs, according to data provider Dealogic.