FAIRFAX, Va. -- Representing what it calls "the last market announcement in our strategy to convert our company-owned retail assets to a branded wholesaler business," Exxon Mobil Corp. told CSP Daily News that it is divesting 236 company-owned gas stations in New Jersey.
"We have begun to provide notification that, after careful evaluation, we have reached agreements to sell our stations and associated fleet operations in 13 New Jersey counties to our existing branded wholesalers, PMG New Jersey II LLC, Lehigh Gas Corp. and NJ Energy Corp.," the company said, referring to a conference call for dealers yesterday morning.
"In compliance with New Jersey law, ExxonMobil will begin the transaction by offering eligible dealers a Right of First Refusal and a bona fide offer to purchase their site," it said.
As reported yesterday in a Morgan Keegan/CSP Daily News Flash, sites not purchased by dealers will be sold to PMG New Jersey II, Lehigh Gas and NJ Energy.
These stations will retain the Exxon gasoline brand, allowing consumers to continue to purchase the same Exxon fuels and use their ExxonMobil credit cards and Speedpass devices.
The company announced its divestment strategy in 2008. "We are committed to the presence of our brands throughout the U.S. through our strong distributor network. This decision results from ExxonMobil's continual evaluation of all aspects of its business in order to maximize the opportunities for long-term growth for the benefit of our employees, customers and shareholders," the company added.
"This could be a great day for small-business owners, as [ExxonMobil's] news has been a long time coming," said Sal Risalvato, executive director of the New Jersey Gasoline, Convenience, Automotive Association (NJGCA) in a statement reacting to the announcement.
In 2008, NJGCA learned that ExxonMobil was seeking to divest its retail assets in New Jersey.
"We knew from previous divestitures that when Big Oil companies sell off their real-estate assets, they typically bundle multiple stations together and sell them to a large distributor. Previously in doing so, they unfairly denied current lessees the opportunity to purchase the locations their businesses were built on, even if they can match the distributors' price," he claimed. "But [this] is a different day, and thanks to the law that was signed by [then] Governor John Corzine in 2009, these dealers will have the opportunity to match an offer by Exxon and purchase their properties."
According to Risalvato, "If recent history has taught us anything about these kinds of transactions, it's that the new landlords--typically mega distributors--always assure their new tenants that nothing will change, but ultimately drive them out of business."
He said that to help prevent this eventuality, NJGCA structured a coalition of Exxon lessee dealers, pro-business legislators and fellow NJGCA franchisee members who sold other gasoline brands to lobby for a Right of First Refusal. Later, Shell and Lukoil dealers also joined the coalition to deal with similar divestitures.
The measure passed in the state legislature, and Corzine signed it into law in June 2009.
Risalvato told CSP Daily News that he believes the current New Jersey deals "would be consummated by the end of the year, and the dealers will be receiving their packages in the next week or so with the price of their properties and with the terms that match the offers [ExxonMobil has] received from one of these three distributors, and they expect closings to take place in the first or second quarter of next year."
He added, "We have tried to have dealers ready for this announcement, so that they can be prepared with the proper financing and environmental studies. We'll pursue this more when the packages are in their hands."
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