FINDLAY, Ohio — Speedway convenience stores have a new owner.
Marathon Petroleum Corp. (MPC) completed its sale of Enon, Ohio-based Speedway LLC to 7-Eleven Inc. on May 14. The two companies agreed to the $21-billion deal in August.
With the closing, Irving, Texas-based 7-Eleven takes ownership of approximately 3,800 stores located in 36 states.
"We are very excited to welcome Speedway into the 7‑Eleven family," said Joe DePinto, president and CEO of 7‑Eleven. "Speedway is a great brand and a strong strategic fit for our business that significantly diversifies our presence throughout the North American market, particularly in the Midwest and on the East Coast. Together, we have the opportunity to redefine and enhance the customer convenience experience nationwide. This is a groundbreaking moment in our company's proud history."
According to 7-Eleven, the acquisition accelerates its growth trajectory while also strengthening the company's financial profile. The addition of Speedway brings 7‑Eleven's total North American portfolio to approximately 14,000 stores and diversifies the convenience retailer's presence to 47 of the 50 most populated metro areas in the U.S., as well as expands its company-operated store footprint.
In conjunction with closing, Findlay-based MPC announced its plans regarding the estimated $16.5 billion of after-tax cash proceeds.
"The close of the Speedway transaction marks a significant milestone in our ongoing commitment to strengthen the competitive position of our portfolio," said MPC's Executive Vice President and Chief Financial Officer Maryann T. Mannen. "This morning, we announced actions to strengthen our balance sheet and return capital to shareholders, which include the expectation to repurchase $10 billion of the company's common stock.
"As part of our commitment to quickly return capital, we plan to commence a cash tender offer to purchase up to $4 billion of common stock, which represents approximately 10 percent of our current market capitalization," she said. "After the completion of the tender offer, we intend to execute on the remainder of our $10-billion repurchase authorization over the subsequent 12 to 18 months.
In addition, $2.5 billion of proceeds have been allocated to reduce long-term structural debt, she said.
"Beyond this, we will evaluate how we use the remaining proceeds to reduce debt to support a strong balance sheet and maintain an investment grade credit profile," Mannen added.
In the coming days, the company intends to commence a "modified Dutch Auction" tender offer to purchase up to $4 billion of its common stock at an anticipated price range between $56 and $63 per share, less any applicable withholding taxes and without interest, subject to market conditions.
In connection with and subject to the closing of the Speedway sale, MPC's board of directors approved an additional $7.1-billion share repurchase authorization. Together with the remaining previous authorization of $2.9 billion, the company has the authority to repurchase up to a total of $10 billion of its common stock. The authorization has no expiration date.