Delek US Inks Deal to Sell Retail Assets for $385M
NASHVILLE, Tenn. — Delek US Holdings Inc. is selling its retail business to international retailer FEMSA.
The two companies entered into a definitive agreement that calls for a subsidiary of FEMSA to acquire 100% of the equity interests in the Delek subsidiaries that operate Delek US Retail for cash consideration of $385 million.
The transaction, which includes inventory, is anticipated to close sometime late in the third quarter or in the fourth quarter of 2024.
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Delek US Retail comprises 249 corporate stores operating primarily in the southwestern United States, including convenience stores in Texas and New Mexico. Delek operates company stores under the DK brand.
FEMSA is one of the largest conglomerates in Mexico with operations in more than 17 countries. Through FEMSA's Proximity & Health Division it operates OXXO — the largest small-format proximity store operator in the Americas with more than 22,800 stores in five countries, including Mexico, Colombia, Chile, Peru and Brazil.
"At FEMSA, we have a long-held ambition to enter the U.S. convenience and mobility industry and this transaction represents the ideal way for us to take our first step in this compelling market," said José Antonio Fernández Garza-Lagüera, CEO of FEMSA's retail operations.
"We have been building and expanding our retail operation in Mexico for more than 45 years, eventually reaching 10 other countries in South America and Europe, and a store base of more than 30,000 locations," he added.
According to Garza-Lagüera, FEMSA is "excited to embark on this new and important journey" with its new DK colleagues.
"The sale of Delek US Retail to FEMSA is an incremental step in our commitment to unlock the sum of the parts value inherent in our system. We are pleased with this transaction and expect to execute on additional steps to unlock value for our stakeholders," said Avigal Soreq, president and CEO of Delek.
"Importantly, it allows us to gain a competitive partner for ongoing and expanded retail fuel sales. We look forward to building on this partnership with FEMSA in both the short and long term," Soreq added. "The transaction creates an exciting opportunity for Delek US Retail and its employees as they become part of FEMSA's growth strategy in the United States."
Delek's exclusive financial advisor was Raymond James & Associates Inc. and its legal advisor was Baker Botts LLP.
Nashville-based Delek US Holdings is a diversified downstream energy company with assets in petroleum refining, logistics, pipelines, renewable fuels and convenience retailing. The refining assets consist primarily of refineries operated in Tyler and Big Spring, Texas; El Dorado, Ark., and Krotz Springs, La., with a combined nameplate crude throughput capacity of 302,000 barrels per day. Pipeline assets include an ownership interest in the 650-mile Wink to Webster long-haul crude oil pipeline.
The logistics operations include Delek Logistics Partners LP, a growth-oriented master limited partnership focused on owning and operating midstream energy infrastructure assets. Delek US Holdings and its subsidiaries owned approximately 72.6% (including the general partner interest) of Delek Logistics Partners LP as of June 30.
Delek is No. 27 on the 2024 Convenience Store News Top 100 ranking.
FEMSA participates in the retail industry through a Proximity Americas Division operating OXXO, a small-format store chain, and other related retail formats, and Proximity Europe which includes Valora, its European retail unit which operates convenience and foodvenience formats. In the retail industry it also participates through a Health Division, which includes drugstores and related activities and Digital@FEMSA, which includes Spin by OXXO and Spin Premia, among other digital financial services initiatives.
In the beverage industry, it participates through Coca-Cola FEMSA, the largest franchise bottler of Coca-Cola products in the world by volume. Across its business units, FEMSA has more than 392,000 employees in 18 countries.