Sunoco LP said Thursday it had agreed to sell most of its convenience stores to 7-Eleven for $3.3 billion so it can focus on its fuel supply business.
The deal includes 1,110 Sunoco convenience stores, mostly on the East Coast and Texas, and a 15-year take-or-pay agreement to supply 7-Eleven with about 2.2 billion gallons of fuel annually. 7-Eleven, which is a subsidiary of Japanese retail group Seven & i Holdings, currently operates 8,700 stores in the U.S. and Canada, including those run by franchisees.
Sunoco said it plans to be “a leading consolidator in the domestic wholesale fuels business, supplying fuel to a network of more than 8,900 locations of third-party dealers, distributors, and other commercial customers.”
The company, a master limited partnership that is owned by Dallas-based Energy Transfer Equity, will sell another 200 Sunoco stores separately but keep its APlus franchisee-operated stores.
“The sale of these retail assets to 7-Eleven is the beginning of an exciting evolution for Sunoco into a premier nationwide fuel supplier,” CEO Bob Owens said in a news release. “Our supply agreement with 7-Eleven provides Sunoco with a predictable long-term income stream, and this transaction quickly allows Sunoco to improve its financial profile.”
Joe DePinto, 7-Eleven chief executive officer, told the Dallas News that the deal “supports our growth strategy in key geographic areas including Florida, mid-Atlantic states, Northeast states, and Central Texas.”
“It also provides 7-Eleven entry into Houston, the fourth largest city in the United States, and a strong presence in Corpus Christi and across South Texas,” he added.
Last year, 7-Eleven’s combined U.S. and Canada sales were estimated at $25 billion, with 60% coming from inside the store and 40% from gasoline pumps, according to Supermarket News. Worldwide 2016 sales exceeded $89 billion.
As Reuters reports, Seven & i Holdings has been aggressively expanding in Japan and the U.S., where it has been acquiring stores from local retailers. “The U.S. convenience store market has growth momentum. We see opportunities there,” Seven & i President Ryuichi Isaka said.