7-Eleven to acquire Speedway for $21bn in cash

  • 3 August 2020
The deal includes approximately 3,900 Speedway stores in the US and a 15-year fuel supply agreement
7-Eleven delivery photo
Photo as seen on the 7-Eleven Facebook page

Marathon Petroleum is selling its Speedway convenience store chain to 7-Eleven for $21 billion in cash. The deal includes approximately 3,900 Speedway stores across the US and a 15-year fuel supply agreement. This acquisition is the largest ever made by 7-Eleven.

“Our announcement crystallises the significant value of the Speedway business, creates certainty around value realisation and delivers on our commitment to unlocking the value of our assets,” said Michael Hennigan, president and chief executive at Marathon. “At the same time, the establishment of a long-term strategic relationship with 7-Eleven creates opportunities to improve our commercial performance,” he added.

Marathon had been close to a deal with Seven & I Holdings, the Japanese parent company of 7-Eleven, earlier this year, but talks were put on hold in March as the Covid-19 lockdown hit the market.

For 7-Elevent, the Speedway acquisition accelerates the growth and diversification of the company, strengthens its financial profile and enhances economies of scale.

Joe DePinto, president and chief executive of 7-Eleven, said: “[The acquisition] will allow us to continue to grow and diversify our presence in the US, particularly in the Midwest and East Coast.”

The transaction is expected to produce compound annual growth in 7–Eleven’s operating income and EBITDA of more than 15% through the first three years following the close of the acquisition, while reducing its debt-to-EBITDA ratio to less than 3x within two years following the close of the acquisition.

Based in Irving, Texas, 7–Eleven operates, franchises or licenses more than 71,100 7-Eleven convenience stores in 17 countries, including approximately 11,800 in North America.

Marathon Petroleum is an integrated downstream energy company. It operates 16 refineries, and its marketing system includes approximately 7,800 branded US locations, including about 5,600 Marathon-branded retail outlets. In addition to Speedway, Marathon is the general partner and majority limited partner interest in midstream marketing company MPLX.

Marathon Petroleum Corp. is a leading, integrated, downstream energy company based in Findlay, Ohio. Its Speedway subsidiary, based in Enon, Ohio, is the third-largest c-store chain in the United States with 3,900 c-stores.

The transaction is expected to close in the first quarter of 2021.