7-Eleven Parent To Acquire Speedway Stores For $21B
The Japanese owner of the 7-Eleven chain of convenience stores, Seven & i Holdings, has inked a deal to acquire the Speedway chain of gas stations/convenience stores for $21B. The buyer is paying the seller, Marathon Petroleum Corp., cash for the properties.
Currently Seven & i Holdings owns more than 9,800 7-Elevens in North America, its largest holding in the Western Hemisphere, and in fact the largest chain of convenience stores on the continent. The company will add about 3,900 Speedway locations to that total, though it plans to keep the brands distinct.
Speedway is currently the third-largest convenience store chain in terms of unit count. Alimentation Couche-Tard, which operates about 8,000 Circle K stores, has the second-largest convenience chain.
"By combining the powerful 7-Eleven brand that has been cultivated thus far with Speedway’s solid brand, we will add economies of scale in the U.S.," the company said in a statement about the deal. It also owns supermarkets and department stores in Japan, and in other countries.
Seven & i Holdings characterizes its overseas convenience store business as one of its core growth areas. "The company believes that the expansion of the store network in the North America market, where the share of major players is still low, will support mid- to long-term growth," the company said.
The Japanese investor thus seems to be betting on the long-term health of the U.S. economy, and the opportunities for convenience store growth, in contrast to the saturated Japanese market.
“There will be a short-term impact from the coronavirus in the U.S., but long-term the population there will keep growing," Hiroaki Watanabe, a logistics analyst and convenience store expert, told Bloomberg.
The acquisition isn't the first major one for the Japanese investor. Over two years ago, 7-Eleven bought about 1,030 Sunoco convenience stores in 17 states.
Convenience stores have been hit by the coronavirus pandemic, as reduced demand for gas brings in fewer customers. Seven & i now expects net profit at the U.S. convenience stores to drop 45% year-over-year to $1.13B for its financial year ending in February 2021, Nikkei Asian Review reports.
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