Marathon Petroleum to sell Speedway for USD21 billion
Marathon Petroleum Corp. (NYSE: MPC) announced yesterday that it and certain of its subsidiaries have entered into a definitive agreement with 7-Eleven, Inc., a wholly owned, indirect subsidiary of Seven & i Holdings Co., Ltd. (3382: Tokyo), whereby 7-Eleven will acquire Speedway for USD21 billion in cash. The transaction 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.”
Strategic Rationale
Certainty of Value for MPC Shareholders: The USD21 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 USD16.5 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 when the transaction closes.
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 conditions, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
About Marathon Petroleum Corporation
Marathon Petroleum Corporation (MPC) is a leading, integrated, downstream energy company headquartered in Findlay, Ohio, U.S.A. The company operates the nation’s largest refining system. MPC’s marketing system includes branded locations across the United States, including Marathon brand retail outlets. Speedway LLC, an MPC subsidiary, owns and operates retail convenience stores across the United States. MPC also owns the general partner and majority limited partner interest in MPLX LP, a midstream company that owns and operates gathering, processing, and fractionation assets, as well as crude oil and light product transportation and logistics infrastructure. For more information, visit www.marathonpetroleum.com.
