Convenience store giant 7-Eleven is adding more than 200 stores located in the southwest United States to its real estate portfolio in a $1 billion acquisition from rival Sunoco.
Irving, Texas-based 7-Eleven, which operates, franchises and licenses more than 13,000 stores in the United States and Canada, agreed Thursday with Dallas-based Sunoco to acquire 204 convenience stores in West Texas, New Mexico and Oklahoma. The details of the deal, including the addresses of the stores in the proposed agreement, were not immediately available.
Sunoco also amended its existing take-or-pay fuel supply agreement with 7-Eleven as part of the deal to "incorporate additional fuel gross profit," Sunoco said. It did not offer additional details of this part of the agreement. The proceeds of this acquisition allow Sunoco to "materially reduce leverage to execute on future growth opportunities while maintaining a strong balance sheet," the company said. Sunoco and 7-Eleven did not immediately return requests for comment from CoStar News.
This isn't the first time 7-Eleven has been a buyer of convenience stores from Sunoco. Years ago, 7-Eleven added more than 1,100 stores to its portfolio that were once Sunoco stores as the energy company sought to exit its portfolio of convenience stores. The $3.31 billion deal added to 7-Eleven's portfolio in 19 geographic areas primarily along the East Coast and Texas. The deal also gave 7-Eleven a foothold into Houston.
Sunoco has been seeking to exit the convenience store business for years. It wasn't immediately clear Thursday if the company had any additional convenience stores in its portfolio. The proposed deal is not expected to change Sunoco's guidance for 2024, with earnings before interest, taxes, depreciation and amortization for the year expected to be between $975 million and $1 billion.
Sunoco, which touts itself as the nation's largest independent fuel distributor, told its stakeholders in a company report published in December that it owned and operated 76 retail convenience stores in Hawaii and New Jersey in 2022. The majority of its customers are "independent operators in the retail fuel space," according to the company.
In announcing the sale of U.S. convenience stores, Sunoco also unveiled plans to acquire a 100% equity interest in the liquid fuel terminals located in Amsterdam, Netherlands, and Bantry Bay, Ireland, from Zenith Energy. A purchase agreement with purchase price is expected to be executed upon the completion of a Dutch works council consultation and information process that's underway.
The Amsterdam terminal is in the Port of Amsterdam, which is an international hub for the global energy market. The Bantry Bay terminal is the largest independent bulk liquid storage terminal in Ireland. The acquisition is expected to be funded through the company's revolving credit facility. The deal is expected to close early this year.
Sunoco's general partner is owned by Energy Transfer. 7-Eleven is owned by Tokyo-based Seven & i Holdings.