Sunoco refocuses on selling wholesale gasoline

Sunoco LP (ticker: SUN) announced the sale of 1,108 convenience stores to Seven & i Holdings Co today, in a transaction valued at approximately $3.3 billion. This transaction implies a value of $2.98 million per store.

Seven & i Holdings, the owner of 7-Eleven, will sell gasoline supplied by Sunoco. Base gasoline volumes set forth in the deal are 2.2 billion gallons per year, which will grow by an additional 500 million gallons over the first four years of the partnership.

Sunoco will use the proceeds from this sale to pay down debt and for “general partnership purposes.” This sale is part of Sunoco’s larger strategic goal to exit the convenience store business. The company is currently looking to sell an additional 207 stores in Texas, New Mexico and Oklahoma, which will leave only stores in Hawaii under the Aloha Petroleum name.

Sunoco Sells 1,110 Stores to 7-Eleven for $3.3 Billion

Source: SUN Investor Presentation

Sunoco is positioning itself as a finished product company, focusing on wholesale fuel. In a press release, the company stated that 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, with an enhanced focus on MLP qualifying income.” The company believes that this transition will allow it to become less capital-intensive and simplify its business model.

Legal Notice