7-Eleven owner pays $21bn for Speedway
The Japanese owner of 7-Eleven is making a $21bn (£15.9bn) bet on US convenience stores with a deal to buy almost 4,000 petrol stations to cement its position in North America.
Seven & i already has close to 10,000 stores in the US and Canada and will add 3,900 Speedway forecourts from Marathon Petroleum to its portfolio that includes 21,000 outlets in Japan and a total of 69,000 worldwide.
The Japanese company had walked away from a deal earlier this year but decided to push ahead to stop Canada’s Alimentation Couche-Tard, the second-biggest convenience operator on the continent, from swooping in.
"The disadvantage of not winning this bid would have been other competitors expanding their business," said its US boss Joseph DePinto.
Seven and i chief executive Ryuichi Isaka said: "This is a once-in-a-millennium opportunity. This is a historic first step as we seek to become a global retailer."
The deal gives 7-Eleven a commanding lead in the US convenience store market with a presence in 47 of the top 50 markets.
Michael Allen, an analyst at Jefferies, said the deal was not as "crazy" as it might seem: "The US market has recovered a lot faster than the Japan market, so I don’t see any issues with that bet."
"The US operations has the biggest growth potential," said Shun Tanaka at SBI Securities. "If the company is able to strengthen its products, it won't just be a place customers stop by for gas, but a competitive retailer."
North America accounted for about 40p of Seven & i’s sales in the most recent financial year, up from about a third five years ago. Three years ago it paid $3.3bn for Sunoco's petrol stations and convenience stores.
The company has expanded the 7-Eleven chain in Japan over the past four decades and bought out the original US business.
The deal is the biggest in the oil sector since the pandemic struck and trails only the almost $30bn that Aon is paying for Willis Towers Watson, according to Bloomberg data.
Marathon, which came under pressure last year from activist investor Elliott Management to break itself up, is the latest oil company to shed its retail operations.
