7-Eleven Inc. has entered into an agreement to acquire U.S.-based convenience store chain Speedway from Marathon Petroleum Corp. The deal involves approximately 3,900 Speedway stores located in 35 states, for $21 billion in cash.
"This acquisition is the largest in our company's history and will allow us to continue to grow and diversify our presence in the U.S., particularly in the Midwest and East Coast," Joe DePinto, president and CEO of 7-Eleven, said in a statement. "By adding these quality locations to our portfolio, 7-Eleven will have the opportunity to bring convenience to more customers than ever before."
7-Eleven currently has more than 9,800 stores in the United States and Canada. The company says Speedway and 7-Eleven have complementary geographic footprints with little overlap.Following the transaction, 7-Eleven will have a presence in 47 of the top 50 most populated metro areas in the U.S.
7-Eleven plans to form an integrated steering committee as it welcomes Speedway's 40,000 team members. The move will explore synergies and support best practices from both companies.
Highlights from the deal:
- Speedway, with annual pre-synergy run-rate EBITDA of approximately $1.5 billion prior to the acquisition, offers significant opportunities for future growth.
- 7-Eleven expects to achieve $475 million to $575 million of run-rate synergies through the third year following closing, while maintaining financial flexibility and a strong balance sheet. The company says it will be even better positioned to continue to pursue profitable growth opportunities.
- 7-Eleven and Speedway will share best practices to deliver products and promotions. The combined company will be well-positioned to maximize efficiencies and optimize relationships with vendors and business partners.
- 7-Eleven is reaffirming its commitment to environmental priorities. Together, the combined company will set mutual and shared 2027 targets to reduce CO2 emissions, to utilize more eco-friendly packaging and sustainable food supplies, and to drive reduction in plastic usage.
Following the transaction, which is expected to be complete Q1 2021, 7-Eleven will operate about 14,000 stores in the U.S. and Canada.