Global Economics

Owner of 7-Eleven Plans Purchase of Marathon’s Speedway

On Sunday, it was reported that the company that owns 7-Eleven, Seven & i Holdings Co. (SVNDY), will spend $21 billion to purchase Marathon Petroleum Corp.’s Speedway gas stations. Seven & i Holdings is currently the largest convenience store franchiser in the entire world and is based out of Tokyo, Japan.

In October of 2019, Speedway was thought to be positioned to gain independence as a company and potentially see public trading. However, this new purchase by Seven & i Holdings Co. will now add 3,900 stores under the belt of the U.S. based 7-Eleven Inc., which currently operates 9,800 stores. Seven & i currently has over 69,000 stores throughout the world.

The CEO and president of 7-Eleven, Joe DePinto, states that the purchase of Speedway gas stations will help to grow and diversify the presence of 7-Eleven stores throughout the U.S., with focus placed on the East Coast and Midwest.

This is not Seven & i Holding’s first venture into expansion in the U.S. market. In 2017, the company also purchased Sunoco LP gas stations. While Seven & i’s foothold is vast in the Japanese market, they are experiencing a convenience store saturation and a difficult labor market; this makes expansion in the U.S. market more appealing. 40% of Seven & i’s sales in the past year were from the U.S. market.

At market close on Friday, Seven & i Holdings had dropped by 3.19% to $15.17 per share. It’s expected that investors will be watching sales and quarterly results closely following the new purchase and expansion attempt.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Trader Buzz). I have no business relationship with any company whose stock is mentioned in this article.


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