Marathon Petroleum sells Speedway to 7-Eleven owner for $21 billion

imageStock Markets1 hour ago (Aug 02, 2020 07:10PM ET)

(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

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.