Valero to Buy Albertson's C-Stores

Details on refiner-marketer's deal to purchase 72 convenience stores, fuel kiosks

SAN ANTONIO -- Dovetailing with recent enhancements to its retail network, Valero Energy Corp. has signed an agreement to purchase 72 convenience stores and fueling kiosks from Albertson's LLC. Once completed, the transaction will expand Valero's company-owned retail presence in Texas, Colorado, Arizona and Louisiana, where Valero already operates approximately 950 company-owned Corner Store locations.

As reported yesterday in a CSP Daily News Flash, the greatest concentration of the newly acquired sites is in the Dallas-Fort Worth, greater Denver, Baton Rouge/Lafayette and Phoenix markets. [image-nocss] The company said that the newly purchased sites will be reimaged to the Corner Store brand and will sell Valero-branded fuel.

Terms of the deal were not disclosed. The transaction is expected to close in August 2008, subject to customary governmental approvals.

"This transaction offers great synergies with our existing retail network and supply chain," said Gary Arthur, president of Valero's Retail Division. "All of these sites are relatively new and offer strong potential for merchandise growth."The 72 units are all at existing, currently open Albertson's sites with unbranded fuel, Valero spokesperson Bill Day told CSP Daily News. The grocery stores, which will remain open, will be separate from Valero's operations. Since the stores are "relatively new," beyond the reimaging, they will require little renovation other than to retrofit them to display Valero's merchandise mix, he said.Stacia Hill Levenfeld, a spokesperson for Albertson's, told CSP Daily News that the sale "allows the company to focus on its core grocery and pharmacy business in these regions."She added, "The fuel centers are currently branded under the Albertsons banner and are located at operating Albertsons stores throughout Arizona, Colorado, Louisiana, New Mexico and Texas. The company will no longer operate fuel centers in these regions…. The company will continue to operate its fuel centers throughout Florida."Valero has been enhancing its retail operations. Upgrades have included the addition of the new Cibolo Mountain coffee, made with 100% Colombian beans, and of its proprietary Fresh Choices snacks, soft drinks, spring water, vitamin water, teas and fresh foods and pastries.This deal involves Boise, Idaho-based Albertson's LLC, versus SUPERVALU 's Albertsons stores. SUPERVALU Inc., Minneapolis, acquired portions of the Albertsons corporation, including Albertsons stores operated in southern California, Nevada, and the Pacific Northwest. Albertson's LLC owns and operates the remainder of the Albertson's stores throughout northern California and the Southwest.San Antonio-based Valero owns and operates 17 refineries throughout the United States, Canada and the Caribbean with a combined throughput capacity of approximately 3.1 million barrels per day, making it the largest refiner in North America. It is also one of the nation's largest retail operators, with approximately 5,800 retail and branded wholesale outlets in the United States, Canada and the Caribbean under various brand names including Valero, Diamond Shamrock, Shamrock, Ultramar and Beacon.

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