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Marathon Petroleum reached a $21 billion deal with 7-Eleven

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Miguel A. Rodriguez
Miguel A. Rodriguez
14 September 2020
Speedway gas stations are under Japanese management

The week starts with a deal between the American Marathon Petroleum and the Japanese 7-Eleven (Seven & i Holdings). 

The American petroleum refining company and the Japanese group reached an agreement after five months of postponing due to the pandemic outbreak. The Ohio-based company will sell its Speedway gas stations in the United States for $21 billion. Speedway is allegedly worth $18 billion, debt included. 

The after-tax proceeds from the sales are around $16.5 billion, and according to Marathon, the money will be used to pay the existing debt.

The deal is to be closed in the first quarter of 2021 and includes an agreement of 15-year fuel supply for 7.7 billion gallons yearly provided by the most significant US refiner by volume. By the deal, the annual growth in 7- Eleven's operating income in the first three years after the transaction is speculated to exceed 15%. 

From the deal, 7- Eleven is looking to reach up to $575 million of synergies (“potential financial benefit achieved through the combining of companies” – according to investopedia.com) in three years or less after the deal closes. 

From analysts' and investors' point of view, it is normal for Seven & i to expand in North America. The deal will help the Japanese company multiply its portfolio with US gas stations and stores, shifting its focus from Japan's saturated market.  

During today’s pre-market, Marathon Petroleum stock is trading higher by more than 15%.

Read more about the latest deals on CAPEX.com!

Sources: reuters.com, prnewswire.com, finance.yahoo.com, investopedia.com


This information/research prepared by Miguel A. Rodriguez does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. The research analyst primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views and consequently any person acting on it does so entirely at their own risk.The research provided does not constitute the views of KW Investments Ltd nor is it an invitation to invest with KW Investments Ltd. The research analyst also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report.The research analyst in not employed by KW Investments Ltd. You are encouraged to seek advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit that conforms to your specific investment objectives, financial situation, or particular financial needs before making a commitment to invest. The laws of the Republic of Seychelles shall govern any claim relating to or arising from the contents of the information/ research provided. 

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Miguel A. Rodriguez
Miguel A. Rodriguez
Financial Writer

Miguel worked for major financial institutions such as Banco Santander, and Banco Central-Hispano. He is a published author of currency trading books.