Marathon’s Speedway Purchasing Hess for Nearly $2.9 Billion
May 28, 2014
Marathon Petroleum’s subsidiary, Speedway, has signed a definitive agreement to purchase Hess Retail Holdings.
Hess is the largest operator of convenience stores along the East Coast and the fifth largest in the U.S. by number of company-operated sites with 1,256 stores located in 16 states. Speedway is the nation's fourth-largest convenience store chain by number of company-owned and operated sites, with approximately 1,480 stores located in nine states. The purchase will reportedly make it the second largest convenience store chain in the U.S.
The addition of Hess' stores to the Speedway network of sites will broaden Speedway's geographic footprint. The combined business will have 2013 revenues of more than $27 billion, 6.2 billion gallons of annual fuel sales, and $4.8 billion of annual merchandise sales at more than 2,700 retail locations. The transaction also includes Hess’ transport operations and shipper operations on various pipelines, including approximately 40,000 barrels per day on Colonial Pipeline.
The total cost of the deal is nearly $2.9 billion. It is expected close late in the third quarter of 2014, subject to customary closing conditions and regulatory approvals.
According to published reports, all Hess locations will be rebranded as Speedway about three years after the deal is approved.
"With this significant geographic expansion, we will be able to further leverage our integrated refining and transportation logistics operations, providing an outlet for an incremental 200,000 bpd of assured sales from our refining system," said Marathon Petroleum President and CEO Gary R. Heminger