News

7-Eleven is buying Speedway gas stations in a $21 billion deal – Business Insider – Business Insider


The United States’ largest independent oil refiner, Marathon Petroleum, announced in October that they were planning to make Speedway its own company. Nine months later, Marathon has struck a deal to sell Speedway.
Japanese retail company Seven & I Holdings, parent company of 7-Eleven, has entered into a purchase agreement to acquire Speedway for $21 billion in cash, the companies announced Sunday.
“This transaction marks a milestone on the strategic priorities we outlined earlier this year,” said Marathon CEO Michael J. Hennigan in a press release. “Our announcement crystalizes the significant value of the Speedway business, creates certainty around value realization and delivers on our commitment to unlock the value of our assets.  At the same time, the establishment of a long-term strategic relationship with 7-Eleven creates opportunities to improve our commercial performance.”
The $21 billion deal comes after mounting pressure from investors, including Elliot Management Corporation, to help offset some of the financial trouble stemming from what it characterized as “chronic underperformance.” The New York Times reports that Marathon announced they would not be reopening two refineries in California and New Mexico that had been placed on a standstill in April. After tax, the Speedway deal is expected to bring in $16.5 billion for Marathon, which they hope will “strengthen [the] balance sheet and return capital to shareholders.”
Acquiring Speedway means the 7-Eleven chain will add roughly 4,000 stores to their United States and Canada prescience, for a total of around 14,000 stores. 
While most convenience stores in the United States are located at gas stations, analysts have noted that 7-Eleven could benefit from the Japanese model of placing convenience stories in urban areas. This deal will create a 7-Eleven presence in 47 of the top 50 most populated metro areas, according to CNN. 
It’s been turbulent year for oil sales across the globe, as the coronavrius pandemic lead to a steep decline in the demand for oil since March, leading to events such as U.S. oil prices dropping below $0 for the first time.
Marathon expects the transaction to close in the first quarter of 2021.

Source : https://www.businessinsider.com/7-eleven-to-buy-speedway-gas-stations-21-billion-deal-2020-8

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button