FINDLAY, Ohio — Marathon Petroleum Corp. has entered into a definitive agreement to sell its Speedway convenience-store chain to 7-Eleven Inc., a wholly owned, indirect subsidiary of Seven & i Holdings Co. Ltd., for $21 billion in cash. The transaction, which includes a 15-year fuel supply agreement, is expected to close in the first quarter of 2021, subject to customary closing conditions and regulatory approvals.
"This transaction marks a milestone on the strategic priorities we outlined earlier this year," said Michael J. Hennigan, president and chief executive officer. "Our announcement crystalizes the significant value of the Speedway business, creates certainty around value realization and delivers on our commitment to unlock the value of our assets. At the same time, the establishment of a long-term strategic relationship with 7-Eleven creates opportunities to improve our commercial performance."
Marathon offered the following strategic rationale for the sale:
Certainty of value for MPC shareholders: The $21 billion valuation represents a significant value unlock. The 100% cash transaction immediately captures value for MPC shareholders relative to potential valuation risks of other alternatives.
Significant after-tax cash proceeds: This transaction is expected to result in after-tax cash proceeds of approximately $16.5 billion. MPC expects to use the proceeds to both repay debt to protect its investment grade credit profile and return capital to shareholders. Specific details will be announced at the time of transaction close.
Long-term relationship drives additional value: The arrangement includes a 15-year fuel supply agreement for approximately 7.7 billion gallons per year associated with the Speedway business. The company expects incremental opportunities over time to supply 7-Eleven's remaining business as existing arrangements mature and as 7-Eleven adds new locations in connection with its announced U.S. and Canada growth strategy.
Approvals and Timing
The transaction has been unanimously approved by the boards of directors of both companies. The transaction is expected to close in the first quarter of 2021 and is subject to customary closing condition.
Marathon Petroleum Corp. is a leading, integrated, downstream energy company based in Findlay, Ohio. Its Speedway subsidiary, based in Enon, Ohio, is the third-largest c-store chain in the United States with 3,900 c-stores.
Irving, Texas-based 7-Eleven Inc. is the largest c-store chain in the U.S. with more than 9,300 stores.