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Mergers & Acquisitions

Sunoco Closes Sale of C-Stores to 7-Eleven

Divestiture of most company-operated retail outlets puts focus on wholesale fuel

DALLAS -- Sunoco LP has closed the strategic divestiture of most of its company-operated convenience stores to 7-Eleven Inc., which acquired approximately 1,030 of Sunoco’s c-stores in 17 states for approximately $3.114 billion.

Dallas-based Sunoco’s strategic divestiture is a major step in transforming it into a more stable-income master limited partnership (MLP) focused on fuel distribution and logistics rather than retailing, the company said.

On the retail side, however, the transaction does not include Sunoco’s APlus franchisee-operated c-stores, and Sunoco’s Aloha Petroleum business unit in Hawaii will continue to operate its integrated business model within Sunoco.

The transaction with 7-Eleven Inc., announced April 6, 2017, includes a 15-year take-or-pay fuel-supply agreement under which Sunoco will supply about 2 billion gallons of fuel annually with an additional 500 million gallons of committed growth in the future.

Sunoco will use the gross proceeds from the transaction to achieve targeted leverage and coverage goals, it said.

Meanwhile, Sunoco's strategic conversion of 207 West Texas retail sites to a commission agent model remains on schedule with a conversion date expected to occur late in first-quarter 2018.

Sunoco also announced the closing of a private offering of $2.2 billion of various senior notes due 2023, 2026 and 2028.

Sunoco distributes motor fuel to about 9,200 convenience stores, independent dealers, commercial customers and distributors in more than 30 states. Its general partner is owned by Energy Transfer Equity LP.

For Irving, Texas-based 7-Eleven, this acquisition is the largest in the company’s history, and will bring its total store count to about 9,700 in the United States and Canada. Seven & i Holdings Co. Ltd., the Tokyo-based parent company of 7-Eleven Inc., operates more than 65,000 stores in 18 countries globally.

  • 7-Eleven ranked No. 1 on CSP's 2017 Top 202 list of the largest c-store chains in the United States. Ahead of the 7-Eleven deal, Sunoco ranked No. 6 on the list. Click here to read "Ranking the Top 40 C-Store Chains: A Year-End Review."

The Federal Trade Commission (FTC) ruled last week that the $3.3 billion acquisition, originally pegged at about 1,100 c-stores, would violate federal antitrust law and would harm competition in 76 markets. Under the terms of the consent agreement that has allowed the deal to go forward, 7-Eleven has agreed to sell 26 retail fuel outlets that it owns to Sunoco, and Sunoco will retain 33 fuel outlets that 7-Eleven otherwise would have acquired.

With the acquisition of the company-operated c-stores in Texas, New York, Florida and other states from Sunoco, the APlus and Stripes c-store brands and the Laredo Taco and Ladson Grill foodservice brands at these locations will continue to serve customers for the time being, said 7-Eleven.

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