Sunoco LP has agreed to sell a majority of its retail outlets to 7-Eleven Inc. for $3.3 billion in cash plus fuel, merchandise, and other inventories.
The assets being sold include 1,110 convenience stores in 19 geographic regions primarily along the East Coast and in Texas, and the associated trademark and intellectual property of Stripes LLC.
As part of the deal, Sunoco will enter a 15-year take-or-pay fuel-supply agreement with a 7-Eleven subsidiary under which Sunoco will supply 2.2 billion gal/year of fuel. The agreement will have guaranteed annual payments to Sunoco, provided that 7-Eleven will continue to use the Sunoco brand at currently branded Sunoco stores, and includes committed growth in future periods.
In a separate process, 200 convenience stores in North and West Texas, New Mexico, and Oklahoma will be sold. Sunoco’s Aloha Petroleum Ltd. business unit in Hawaii will continue to operate its integrated business model within the company. The deal also excludes Sunoco’s APlus franchisee-operated stores.
The firm says the deal is a first step in its strategic shift away from company-operated convenience stores to focus on its fuel-supply business.
Led by the Sunoco fuel brand and APlus franchise, Sunoco says it plans to become 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, with an enhanced focus on master limited partnership qualifying income.
Proceeds from the deal, expected to close by the fourth quarter, also will be used to enhance Sunoco’s credit and leverage profiles.
Sunoco Logistics Partners LP and Energy Transfer Partners LP late last year agreed to merge in a $20-billion deal that’s expected to close this month (OGJ Online, Nov. 21, 2016).
