7-Eleven owner beats rival with $21b bet on US market
Japanese retailer returns to strike deal after stepping away earlier this year
Seven & i Holdings Co., the world’s largest convenience store operator, is betting $21 billion on the future of quick-stop shopping in the US, reviving a once-abandoned deal to make sure the target didn’t fall into the hands of a competitor.
The global operator of the 7-Eleven franchise agreed to buy Marathon Petroleum Corp’s fuel-station business, adding 3,900 Speedway outlets to clinch a dominant position of almost 14,000 stores in the US and Canada.
Seven & i pushed ahead despite the uncertainty of the pandemic and investor pessimism. Its shares declined 4.8 per cent in Tokyo yesterday. Marathon rose 13 per cent before regular US trading hours.
The Japanese retailer returned to strike a deal after
stepping away from negotiations earlier this year.
Competitor concerns
Concerned that Canada’s Alimentation Couche-Tard Inc., the second-largest convenience store operator in North America, would snap up Speedway for itself, Seven & i decided to aim for scale.
The transaction will give 7-Eleven a presence in 47 out of the top 50 metropolitan markets in the US and a commanding
lead in the country’s convenience-store segment.
“The disadvantage of not winning this bid would have been other competitors expanding their business,” Joseph DePinto, president of the 7-Eleven Inc. US operation, said on a conference call Monday.
Seven & i owns the 7-Eleven brand after operating and expanding the franchise in Japan over the past four decades, buying out the original US business.