Marathon, under pressure from activist investor Elliott Management, said last year it would launch sweeping restructuring, including spinning off Speedway, which it said was worth as much as $18 billion, including debt.
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.
For Seven & i, owner of the 7-Eleven convenience store chain, the deal helps it shift its focus beyond a saturated Japan market, multiplying its portfolio of U.S. gas stations and corner stores acquired through a $3.3 billion deal with Sunoco in 2017.
7-Eleven said the latest deal will bring its store count in the United States and Canada to about 14,000.
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 Japanese company abandoned the deal in March, according to sources at the time, due to worries about the price tag – reportedly around $22 billion – especially due to growing concerns about global economic slowdown amid the virus outbreak.
Many analysts and investors had said the initially reported deal price was too high. But some also said it still made sense for Seven & i to expand further in North America.
In Japan, the convenience store chain faces a slow economy as well as tough competition from rivals such as FamilyMart and Lawson, as well as discount drugstores and online retail giants like Amazon.com.
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 also produce compound annual growth over 15% in 7-Eleven’s operating income through the first three years after closing, the company said. It added the purchase price reflected $3 billion in tax benefits.
Seven & i, Canadian convenience store operator Alimentation Couche-Tard and private equity firm TDR Capital had prepared rival bids late last month for Speedway, Reuters reported in July. (Reporting by Ritsuko Ando in Tokyo and Kanishka Singh in Bengaluru; Editing by Dan Grebler and Christopher Cushing)
- Residents blame Ludhiana MC for ignoring fogging
- Mumbai: Two missing after a fishing boat carrying 13 fishermen capsizes
- Theatre doyen Ebrahim Alkazi who trained Naseeruddin Shah, Om Puri dies at 94
- Won’t spare any politician or public servant found complicit in hooch tragedy: Punjab CM
- Nitish Kumar recommends CBI probe in Sushant case, sets up a new row
- Covid-19: Indigenous Australian group blocks Uluru access route over pandemic fears
- Covid-19 will disappear with blessings of Lord Ram, says Shiv Sena ahead of ‘bhoomi pujan’ ceremony
- Kolkata airport operations will be suspended for 7 days in August due to Bengal lockdown
- Coronavirus lockdown study reports surge in health anxieties
- HC adjourns virtual hearings after heavy rainfall in Mumbai, hearings postponed to Wednesday
- Congress again reaches out to rebel Rajasthan MLAs, lists its only condition
- Kareena Kapoor, Kajol, Alia Bhatt, Tara Sutaria dress to impress for Rakhi 2020
- Early indicators of economic activity in July show improvement over June: Nomura
- Tripura CM in home quarantine after two family members test Covid positive
- Aam Aadmi Party to restructure Delhi unit with an eye on municipal polls: Gopal Rai