Seven & i, one of Japan’s famed retail companies will buy the US-based Marathon Petroleum’s Speedway gas stations for $21 billion, media reports said. The acquisition comes at a time when many companies are struggling to generate revenue.
Ryuji Isaka, president of Seven & i, told the media, “expanding in the United States was still beneficial given its growing population and economy, regardless of the pandemic’s hit to consumer spending. The coronavirus is not going to go on forever.”
Once the acquisition is completed, the Japanese company expects to foray into markets outside, where its stores and supermarkets are facing tough competition from other companies such as Walmart.
It is reported that the deal will assist Seven & i to increase its store count in Canada and the US and bolster its earnings capacity.
According to Marathon Petroleum, it expects to close the deal in the first quarter of 2021 and generate after-tax proceeds of about $16.5 billion after getting approval from the boards of both companies. A portion of the capital will be used to clear debts including shareholders returns.
The deal also includes a 15-year fuel supply agreement for about 7.7 billion gallons a year associated with the Speedway business.
The acquisition is considered to be one of the biggest in 2020. The pandemic hasn’t stopped the two companies from carrying out the acquisition while others are preserving their balance sheets instead of seeking expansion.