Mergers & Acquisitions

Who Will Buy Speedway?

Report: Sources point to possible acquirers for Marathon Petroleum’s retail network
Photograph courtesy of Marathon Petroleum

FINDLAY, Ohio — Speedway LLC, which Marathon Petroleum Corp. decided in late 2019 to spin off or sell, has attracted several buyers, according to a new Bloomberg report. Seven & i Co. Ltd., the parent company of 7-Eleven Inc., and TDR Capital, a private equity firm connected to EG Group, are considering bids for the convenience-store network, sources familiar with the matter told the news agency.

Through Enon, Ohio-based Speedway, Marathon Petroleum owns and operates approximately 4,000 c-stores in 30 states, primarily under the Speedway, SuperAmerica and Arco brands. Speedway is No. 3 in CSP’s2019 Top 202 ranking of U.S. c-store chains by number of company-owned retail locations.

Prompted by activist investors, as well as an ongoing evaluation of its business units, Findlay, Ohio-based Marathon Petroleum began a strategic review of Speedway in 2017. Based on a recommendation from an independent committee, Marathon Petroleum decided to keep Speedway as an integrated business unit. By late 2019, however, continuing investor pressure and changes in the marketplace prompted Marathon Petroleum to decide to spin off the retail unit into an independent, publicly traded company.

Bloomberg reported in late January that Marathon Petroleum was exploring a sale of Speedway rather than a spinoff, and speculation about a buyer has steadily intensified.

Tokyo-based Seven & i is working with advisers as it considers buying Speedway, sources told Bloomberg. Any acquisition of Speedway could value the business at more than $20 billion, the sources said, asking not to be identified because the information is private.

TDR Capital has also been weighing a deal for Speedway, the sources said. The firm is interested in merging Speedway with one of its portfolio companies, Blackburn, U.K.-based c-store operator EG Group, in a transaction that could be worth an estimated $26 billion, the sources said. The proposal envisioned a tax-efficient method known as a Reverse Morris Trust, the report said.

Other suitors have also shown interest in Speedway, the report said. Representatives for Marathon, Seven & i, EG Group and TDR declined to comment to the news agency.

Seven & i, Japan’s largest c-store operator, has more than 69,000 stores in 18 markets globally. Based in Irving, Texas, 7-Eleven operates, franchises or licenses more than 70,000 stores in 17 countries, including 11,800 in North America. 7-Eleven is No. 1 in CSP's2019 Top 202 ranking.

EG Group entered the U.S. c-store market in early 2018 as EG America with the acquisition of Cincinnati-based Kroger’s 762 c-stores. It then picked up 226 Minit Mart stores from TravelCenters of America, Westlake, Ohio; 70 sites from Certified Oil, Columbus, Ohio; and 54 stores from Fastrac, Syracuse, N.Y. And in July, EG Group made its second-biggest acquisition: the 562 locations of Cumberland Farms. It completed that acquisition in late October and now has its headquarters in Westborough, Mass. EG Group is No. 8 on CSP’s 2019 Top 202 ranking.

Mohsin and Zuber Issa founded EG Group in 2001 as Euro Garages. It became EG Group in 2016 when Euro Garages merged with TDR’s European Forecourt Retail Group. The company has about 5,400 sites in Europe, the United States and Australia. EG Group is also considering a bid for refiner and c-store retailer Caltex Australia Ltd.

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