(C) Reuters. FILE PHOTO: A motorist fuels-up his car at a Speedway gas station in Des Plaines, Illinois
(Reuters) – Marathon Petroleum Corp (N:MPC) sold its Speedway gas station network to 7-Eleven Inc, a subsidiary of Japan’s Seven & i Holdings Co (T:3382), for $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 $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 U.S. 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.
7-Eleven also said it expects to achieve $475 million to $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 $3 billion in tax benefits.
Canadian convenience store operator Alimentation Couche-Tard Inc (TO:ATDb), Seven & i Holdings and private equity firm TDR Capital had prepared rival bids late last month for Speedway, Reuters reported in July.
Marathon Petroleum sells Speedway to 7-Eleven owner for $21 billion
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