Sunoco to divest 1,100 convenience stores to 7-Eleven for $3.3bn
US-based fuel retailer Sunoco has agreed to divest around 1,100 convenience stores for $3.3bn to 7-Eleven, a subsidiary of Japanese retail group Seven & I.
Sunoco intends to utilize the sale proceeds to repay its debts and for general partnership purposes.
A subsidiary of Energy Transfer, Sunoco’s divestiture of a majority of its convenience stores is to focus on its core business of fuel supply.
The stores that will be sold by Sunoco are located across 18 US states, mainly along the East Coast and in Texas.
Also part of the sale agreement are the trademarks and intellectual property of Stripes, convenience store chain and the Laredo Taco Company, a Mexican fast food chain.
7-Eleven president and CEO Joe DePinto said: “This acquisition supports our growth strategy in key geographic areas including Florida, mid-Atlantic states, Northeast states, and Central Texas.
“It also provides 7-Eleven entry into Houston, the 4th largest city in the United States, and a strong presence in Corpus Christi and across South Texas.”
Following the acquisition, 7-Eleven would grow its tally of stores close to 10,000 in the US and Canada.
As per the deal, Sunoco will supply around 2.2bn gallons of fuel annually for a 15-year period for a subsidiary of 7-Eleven in a take-or-pay agreement.
Sunoco president and CEO Bob Owens said: “The sale of these retail assets to 7-Eleven is the beginning of an exciting evolution for SUN into a premier nationwide fuel supplier.
“Our supply agreement with 7-Eleven provides SUN with a predictable long-term income stream, and this transaction quickly allows SUN to improve its financial profile.”
Sunoco has stated that nearly 200 convenience stores in New Mexico, Oklahoma, and North and West Texas will be divested in a separate process.
The company’s Hawaii-located Aloha Petroleum business unit remains unaffected by the 7-Eleven deal and will continue operating under Sunoco. Same will be the case with the Aplus franchisee-model stores which are not part of the divestiture.
Based on regulatory approvals and customary closing conditions, the transaction is likely to close by the final quarter.
Image: A Sunoco gas station in the US. Photo: courtesy of Mike Kalasnik from Fort Mill, USA/Commons.wikimedia.org.