Seven & i Holdings Co 3382.T on Thursday said it would buy convenience stores and petrol stations from Texas-based Sunoco LP SUN.N for about $3.3 billion, as the Japanese retailer accelerates efforts to boost its U.S operation. Sunoco's retail business includes more than 1,300 stores and reported operating income of $103 million previous year on revenue of $7.7 billion.
7- Eleven Inc., the largest chain in the convenience-retailing industry, is pleased to announce it has entered into an asset purchase agreement with Sunoco LP. The stores will retain the Sunoco brand.
This acquisition will bring 7-Eleven's total number of stores to 9,815 in the United States and Canada.
Sunoco's shares jumped as much as 24 percent to $29.50 in morning trading on Thursday - their biggest one-day percentage rise in three years.
Its latest purchase comes as operators of traditional big-box retailers including Seven & i have been suffering weak sales as changing tastes and modest wage growth have prompted shoppers to defect to cheaper speciality chains and online outlets.
Seven & i Holdings Co. agreed to pay $3.3 billion for some Sunoco LP shops and gasoline retailers in an ambitious push by the 7-Eleven convenience chain owner to expand its USA footprint with its largest deal on record.
The company also believes it can add to its US footprint at a "cheap" price relative to some of its prior acquisitions. Sunoco's Aloha Petroleum business unit in Hawaii will continue to operate "its highly efficient and integrated business model within Sunoco". Sunoco expects to use the proceeds to repay indebtedness and for general partnership purposes. "Our supply agreement with 7-Eleven provides SUN with a predictable long-term income stream, and this transaction quickly allows SUN to improve its financial profile". The deal also includes the sale of the Stripes and Laredo Taco Company brands. Breaking that down further, it has performed -1.36% for the week, -2.33% for the month, -10.58% over the last quarter, -12.08% for the past half-year and -18.08% for this previous year.