7-Eleven Scraps Bid to Acquire Speedway

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Speedway convenience store and gas station

7-Eleven Scraps Bid to Acquire Speedway

03/05/2020
logo for Seven & i Holdings Inc.

FINDLAY, Ohio — Marathon Petroleum Corp. (MPC) and Seven & i Holdings Inc. are no longer working on a deal.

The two companies were reportedly in exclusive talks for Seven & I Holdings, the Tokyo-based parent company of Irving, Texas-based 7-Eleven Inc., to acquire MPC's retail network, Speedway LLC. However, Seven & i Holdings has pulled out of those talks, according to several news sources.

The $22-billion deal would have added roughly 4,000 convenience stores to Seven & i Holdings' footprint in North America. 7-Eleven operates more than 70,000 stores in 17 countries globally, including 11,800 in North America.

According to Bloomberg, several factors played into the end of negotiations, including the new coronavirus and Seven & i concerns over valuations.

The news source explained that growing reports of the new coronavirus, called  COVID-19 — which began in China and has spread to numerous other countries — is impacting deals as many think global economic growth will be impacted. 

The Nikkei added that Seven & i made the decision in a board meeting on March 5. Citing sources familiar with the talks, the biggest hurdle for the acquisition was the price, which was deemed too high by the Japanese company, the news outlet reported.

MPC began exploring a possible sale of Enon-based Speedway even as it moves toward spinning off the c-store chain into an independent company by year's end, a decision is announced in late October, as Convenience Store News previously reported.

Under that plan, the new Speedway will consist of all of MPC's company-owned and company-operated convenience stores — which collectively generate $1.5 billion of annual EBITDA.

Either way, MPC plans to invest $550 million in Speedway, primarily focusing converting c-stores MPC added to its portfolio through several acquisitions over the past two years — notably, its strategic combination with San Antonio-based Andeavor in the fall of 2018 — to Speedway's branding and systems.

The $550-million capital boost is in line with MPC's $530-million investment in Speedway in 2019.

Findlay-based MPC operates the nation's largest refining system with more than 3 million barrels per day of crude oil capacity across 16 refineries. MPC's marketing system includes branded locations across the United States, including Marathon brand retail outlets. Speedway LLC, a MPC subsidiary, owns and operates retail convenience stores across the U.S. MPC also owns the general partner and majority limited partner interest in MPLX LP, a midstream company that owns and operates gathering, processing, and fractionation assets, as well as crude oil and light product transportation and logistics infrastructure.