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Montevideo, September 22nd 2020 - 17:55 UTC

 

 

Major sale of gas station network in the US for an all cash deal of US$ 21bn

Monday, August 3rd 2020 - 09:45 UTC
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The deal is expected to close in the first quarter of 2021, includes a 15-year fuel supply agreement for about 7.7 billion gallons per year associated with Speedway The deal is expected to close in the first quarter of 2021, includes a 15-year fuel supply agreement for about 7.7 billion gallons per year associated with Speedway

Marathon Petroleum Corp sold its Speedway gas station network to 7-Eleven Inc, a subsidiary of Japan's Seven & Holdings Co, for US$21 billion in an all-cash deal, the companies said on Sunday.

After-tax proceeds from the sale, which has been approved by the boards of both companies, are estimated at US$16.5 billion, Marathon said, adding it will use the proceeds to pay existing debt.

The deal, which is expected to close in the first quarter of 2021, includes a 15-year fuel supply agreement for about 7.7 billion gallons per year associated with the Speedway business, said Marathon, the largest US refiner by volume.

The agreement takes 7-Eleven's store count to about 14,000 locations in the United States and Canada. It will buy about 3,900 Speedway stores located in 35 states, it said in a separate statement.

Eleven also said it expects to achieve US$475 million to US$575 million of synergies through the third year after the deal's closing.

The deal will produce compound annual growth over 15% in 7–Eleven's operating income through the first three years after closing, the company said. It added that the purchase price reflected US$3 billion in tax benefits.

 

Categories: Energy & Oil, United States.

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