Convenience retailer Sunoco (SUN) has signed an agreement to sell its 1,110 convenience stores in the US to 7-Eleven in a $3.3bn transaction.
The sale proceeds will be used by the company to repay debts and for general partnership purposes.
Sunoco president and CEO Bob Owens said: "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."
Following the acquisition, 7-Eleven’s total number of stores will increase from the existing 8,707 to 9,815 in the US and Canada.
As part of the agreement, Sunoco will see 1,110 convenience stores in 19 geographic regions mainly along the East Coast and in Texas, as well as the associated trademarks and intellectual property of the Laredo Taco Company and Stripes.
The company will also sign a 15-year agreement with a subsidiary of 7-Eleven to supply approximately 2.2 billion gallons of fuel per annum.
Under the agreement, 7-Eleven will continue to use the Sunoco brand at currently branded Sunoco stores.
In addition, Sunoco will sell 200 convenience stores in North and West Texas, New Mexico and Oklahoma.
Sunoco’s Aloha Petroleum business unit in Hawaii will continue to operate its integrated business model within the company.
The deal excludes Sunoco’s APlus franchisee-operated stores.
Subject to regulatory clearances and customary closing conditions, the transaction is slated for completion in the fourth quarter of this year.
Sunoco operates a total of 1,345 convenience stores and retail fuel sites.
Image: Sunoco service station in Ypsilanti, Michigan. Photo: courtesy of Dwight Burdette via Wikipedia.