Mergers & Acquisitions

FTC Confirms 7-Eleven’s Divestitures for Speedway Deal

Agency officially acknowledges transactions to satisfy anticompetitive concerns
7-eleven speedway

WASHINGTON — A new statement from the Federal Trade Commission (FTC) suggests that the disagreement over 7-Eleven Inc.’s acquisition of Speedway from Marathon Petroleum Corp. has been settled amicably. 7-Eleven and Marathon Petroleum have agreed to divest 293 convenience stores in local markets across 20 states to settle FTC concerns that 7-Eleven’s acquisition of Speedway violated federal antitrust laws, the agency has announced.

7-Eleven completed the acquisition on May 14, 2021, in accordance with the law, on the date agreed upon by 7-Eleven and the FTC, the retailer said. But the same day, two of the four FTC commissioners, Acting Chairwoman Rebecca Kelly Slaughter and Commissioner Rohit Chopra, issued a statement saying the company knew the acquisition violated Section 7 of the Clayton Act and Section 5 of the FTC Act and that the transaction might be illegal and that the deal still raised “significant competitive concerns in hundreds of local retail gasoline and diesel fuel markets across the country.”

7-Eleven and Marathon Petroleum defended the closing, saying that it was legal and that the companies had satisfied all of the required conditions.

“7-Eleven is disappointed by the statement as it fails to acknowledge the facts that led to 7-Eleven closing the transaction,” the company said at the time. “To be clear, 7-Eleven was legally allowed to close on the Speedway transaction [on May 14] and statements or implications to the contrary are false.”

In a separate statement, Marathon Petroleum said, “The parties closed the transaction after all conditions to close were fully satisfied,” and that it “is in receipt of the $21 billion sale proceeds, and Speedway and its assets are owned by 7-Eleven.”

According to the FTC’s complaint, markets for retail gasoline and retail diesel fuel are highly localized, and consumers have no economic or practical alternatives to the retail sale of gasoline or diesel fuel. The complaint alleges that the acquisition would harm competition for the retail sale of fuel in 293 local markets across Arizona, California, Florida, Illinois, Indiana, Kentucky, Massachusetts, Michigan, North Carolina, New Hampshire, Nevada, New York, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, Virginia and West Virginia. In 140 of those markets, competition for retail sale of gas would be harmed; in 29 markets, competition for retail sale of diesel would be harmed; and in 124 markets, competition for retail sale of both types of products would be harmed.

The complaint alleges that without a remedy, the acquisition would reduce the number of independent competitors to three or fewer in each of the 293 markets.

Under the terms of the proposed consent order, in previously announced deals, the FTC has required 7-Eleven and Marathon to divest 124 retail fuel outlets to Anabi Oil, Upland, Calif., including 123 Speedway outlets and one 7-Eleven outlet. They are also required to divest 106 retail fuel outlets to CrossAmerica Partners, Allentown, Pa., including 105 Speedway outlets and one 7-Eleven outlet. And they must divest 63 Speedway retail fuel outlets to Jacksons Food Stores, Meridian, Idaho.

In addition, to remove impediments that could prevent the buyers from competing in these markets, the proposed order also prohibits 7-Eleven from enforcing any noncompete provisions as to any franchisees or employees working at or doing business with the divested assets, said the FTC.

The proposed order also requires 7-Eleven, Inc. and Marathon, for a period of five years, to obtain prior FTC approval before purchasing any of the divested outlets. For 10 years, the companies must provide prior notice of future acquisitions of the divested assets and other assets identified by the FTC within the 293 local markets at issue, plus an additional three markets. Acquisitions in these markets likely would raise the same competitive concerns but may fall below the Hart-Scott-Rodino Act premerger notification thresholds, according to the agency.

*7-Eleven is No. 1, and Speedway is No. 3, inCSP’s 2021 Top 202 ranking of the largest U.S. c-store chains. Anabi Oil is No. 23, CrossAmerica is No. 48 and Jacksons Food Stores is No.  

Prior to this acquisition, Irving, Texas-based 7-Eleven owned, operated or franchised approximately 9,500 U.S. c-stores. Findlay, Ohio-based Marathon operates a vertically integrated refining, marketing, retail and transportation system for petroleum and petroleum products; prior to this deal, Marathon controlled Speedway, Enon, Ohio, which operated almost 4,000 U.S. fuel outlets.

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