According to an authentic source, the Japanese owner of 7-Eleven is acquiring the Speedway chain of gas stations in a deal of around $21 billion. Both these firms announced the cash deal between them in a statement late Sunday. The deal is one of the world’s biggest acquisitions since the COVID-19 pandemic hit earlier this year.
7-Eleven owner buys Speedway gas stations for $21 billion – CNN https://t.co/kiX1LQas39 via @googlenews
wonder what happens to my speedway points. Guess that was cheaper than buying Hess stations a few years ago??
— Clarke Thomas (@needcaffeine) August 3, 2020
Seven & I Holdings, the Japanese retail giant – which owns 7-Eleven and some other outlets such as the Sogo and Seibu department stores and supermarket chain Ito-Yokado – says it is the largest acquisition in the history of the company. Seven & I is the largest Japanese convenience store chain with twenty-one thousand stores there.
Moreover, also, it owns almost nine thousand and eight hundred stores in the U.S. and Canada. The firm is planning to expand the business overseas as its domestic market grows progressively saturated. By buying Speedway, the Japanese retailer would pick around four thousand stores and give its operations in North America a lift.
The deal brings 7-Eleven a presence in 47 of the U.S. top 50 metro areas
The deal between these two companies brings 7-Eleven a presence in forty-seven of the primary fifty most populated metro areas in the U.S., according to the press release from 7-Eleven. The CEO and President of 7_Eleven, Joe DePinto, states that the agreement will allow them to continue to build and expand their presence in the United States, specifically in the East Coast and Midwest.
Meanwhile, the United States oil refiner Marathon Petroleum announced last October to aim to grow Speedway. That decision came after Elliot Management – the activist investor forced Marathon to split into three firms to remedy the chronic under-performance of the company. Elliott anticipated a separate Speedway as one of those firms.
Most of the convenience stores in America are present at gas stations. However, experts long argued that Seven and I could benefit by repeating the Japanese model of developing stores in urban city centers. All the same, investors frightened because of the steep price tag of the agreement. Seven & I Holdings’ shares plunge almost nine percent in Monday trading in Tokyo, its top one-day percentage drop since 23rd March. Previously it was down almost six percent.
Along with several other retailers, the profits of Seven & I hit hard by stay-home orders during the coronavirus pandemic. Net profits in March to May quarter fell seventy-three percent to $131 million (13.9 billion yen). The firm said that it expects net profits to tumble forty-five percent to $1,1 billion (120 billion yen) in the financial year ending February 2021.
Read Also: American Airlines warns to cancel Boeing Max orders