Marathon Petroleum Reportedly Exploring Sale of Speedway

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Marathon Petroleum Reportedly Exploring Sale of Speedway

02/03/2020
Speedway convenience store

ENON, Ohio — Although Marathon Petroleum Corp. (MPC) announced in the fall it was spinning off Speedway LLC, it may have other plans now.

According to a report by Bloomberg, the Findlay-based oil company has received offers to buy its convenience store network. With approximately 4,000 c-stores, Enon-based Speedway could be worth $15 billion to $18 billion, including debt, as a standalone company.

MPC has not made a final decision on whether to sell or to stick with its original plan to spin off the retail arm. The report cited people who asked not to be identified because the matter is not public.

"A spinoff actually creates more value for MPC shareholders than an outright sale," Manav Gupta, an analyst at Credit Suisse AG, said Friday in a note to investors. "However, we understand why some investors would have a strong preference for a sale over spinoff given it’s a lower-risk transaction that unlocks value a lot more quickly than a spinoff."

A representative for Marathon Petroleum decline to comment to Bloomberg.

In October, MPC said it was spinning off Speedway — a decision it made following a 10-month strategic review process. Its strategic tie-up with Andeavor, which closed in October 2018, triggered the review, as Convenience Store News previously reported.

Under the plan, the new Speedway would consist of all of MPC's company-owned and company-operated c-stores, which collectively generate $1.5 billion in annual EBITDA. MPC expected Speedway to become an independent company by the end of 2020.

MPC is an integrated downstream energy company that operates the nation's largest refining system, with more than 3 million barrels per day of crude oil capacity across 16 refineries. Its marketing system includes approximately 7,800 branded locations across the United States, including approximately 5,600 Marathon brand retail outlets.