Alexandria Speedway Locations to Change to 7-Eleven

Marco Green
August 4, 2020

As part of the agreement, 7-Eleven will acquire about 3,900 Speedway stores located in 35 states for $21 billion in cash. The deal is the second-largest purchase of a USA target this year. Previously, Seven & i Holdings Co Ltd (7-Eleven franchiser) spent $3.3 billion three years ago to also buy Sunoco LP gas stations.

United States oil refiner Marathon Petroleum, meanwhile, announced its intention to spin off Speedway last October. It had been seeking to spin off Speedway for months. Negotiations between Marathon and Seven & I had stumbled earlier this year over price.

Marathon praised the deal in its announcement as a step forward in its efforts to shore up its finances and stave off pressure from activist investors seeking to dismantle the company.

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.

Its owner, Marathon Petroleum, has agreed to sell the chain to the owner of 7-Eleven, creating a gas station behemoth, on the scale of McDonald's or Walmart.

The deal is subject to customary regulatory approvals and closing conditions and is expected to be completed next year in the first quarter.

Marathon, under pressure from activist investor Elliott Management, said past year it would launch sweeping restructuring, including spinning off Speedway, which it said was worth as much as $18 billion, including debt.

The spinoff underlines the current turmoil in oil refining.

Other reports by Click Lancashire

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