Oil, C-Store Action Makes 2013 Fortune 500 'Fun to Watch'

Wal-Mart wrests top spot back from ExxonMobil; spinoffs, M&A trending

NEW YORK -- Wal-Mart Stores Inc. and Exxon Mobil Corp. again flipped positions in the 2013 Fortune 500 ranking of U.S. companies by revenue, with the retail giant taking the No. 1 spot away from the major oil company, which settled back to No. 2.

After a few years of caution following the financial crisis, in 2012 corporate America was once again seized by the urge to action, Fortune said in analyzing this year's rankings. The shift to aggressive behavior is exemplified by two major trends in the 500. The first trend is an increase in spinoffs, as companies shed nonfundamental business units to concentrate on their core strengths. The fast action that had been missing--that shifts the tectonic plates of U.S. industry and makes the 500 fun to watch--is back.

The second trend is a resurgence in mergers and acquisitions. For several years players have been hoarding cash and shunning expansion. In 2012 they put that cash--and their rapidly appreciating shares--to work in the best year for M&A in over a decade.

The spinoff surge created three new Fortune 500 companies on this year's list. The largest deal came out of Big Oil. The integrated petroleum producers continue to unwind their previous strategy of covering the gamut from drilling to retailing. For several years they've been shedding refineries to focus on higher-margin exploration and production. In 2012 the shift accelerated. ConocoPhillips spun off its refining arm as Phillips 66. The new company, Phillips 66, replaced its former parent at No. 4 on the list, while ConocoPhillips fell to No. 45.

Another spinoff entering the list is Kraft Foods Group (No. 151), the offspring of the former Kraft Foods, which renamed itself Mondelez (No. 88). The new Kraft Foods specializes in groceries and beverages (Philadelphia cream cheese, Maxwell House coffee), while Mondelez markets snacks (Oreo cookies, Cadbury candy bars).

M&A also proved a powerful force in recasting this year's Fortune 500; 13 companies exited the list, accounting for $201 billion in sales. That's almost triple last year's revenue total for departed companies, and the highest number since 2000. In 10 of those deals, the buyer was another 500 member that in most cases substantially raised its ranking. Once again energy was a prime mover. Energy Transfer Equity, a pipeline company, purchased Sunoco's 7,900-mile network of pipelines and 4,900 gas stations, doubling revenues to $17.2 billion and rising from No. 312 to No. 161. In fact, Sunoco, which ranked 61st in 2011, disappeared from the list. The petroleum giant also sold its refinery operations to the Carlyle private equity group, and as a result of the two sales, ceased to exist.

The list of petroleum, convenience and related industry players includes, among others:

  • Exxon Mobil (No. 2, with $469.2 billion in revenues).
  • Chevron (No. 3 with $233.9 billion).
  • Phillips 66 (No. 4 with $169.6 billion).
  • Valero (No. 9 with $138.3 billion).
  • Kroger (No. 23 with $96.8 billion).
  • Marathon Petroleum (No. 33 with $76.8 billion).
  • Walgreen (No. 37 with $71.6 billion).
  • PepsiCo (No. 43 with $65.5 billion).
  • ConocoPhillips (No. 45 with $63.4 billion).
  • Coca-Cola (No. 57 with $48 billion).
  • World Fuel Services (No. 74 with $38.9 billion).
  • Hess (No. 75 with $38.4 billion).
  • Mondelez International (No. 88 with $35 billion).
  • Tesoro (No. 95 with $32.5 billion).
  • Murphy Oil (No. 104 with $28.8 billion).
  • McDonald's (No. 111 with $27.6 billion).
  • Kraft Foods Group (No. 151 with $18.3 billion).
  • Altria Group (No. 159 with $17.5 billion).
  • Energy Transfer Equity (No. 161 with $17.3 billion).
  • General Mills (No. 169 with $16.7 billion).
  • Marathon Oil (No. 174 with $16.2 billion).
  • Dollar General (No. 175 with $16 billion).
  • Kellogg (No. 192 with $142.5).
  • Yum Brands (No. 201 with $13.6 billion).
  • Starbucks (No. 201 with $13.3 billion).
  • Western Refining (No. 283 with $9.5 billion).
  • Family Dollar Stores (No. 287 with $9.3 billion).
  • TravelCenters of America (No. 329 with $8 billion).
  • Dollar Tree (No. 346 with $7.4 billion).
  • The Pantry (No. 347 with 7.4 billion).
  • Core-Mark Holding (No. 368 with $6.9 billion).
  • Hershey (No. 384 with $6.6 billion).
  • Casey's General Stores (No. 392 with $6.5 billion).
  • Dr Pepper Snapple Group (No. 427 with $6 billion).
  • Susser Holdings (No. 460 with $5.5 billion).

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