Sunoco To Sell Majority Of Convenience Stores To 7-Eleven For $3.3 Bln

(RTTNews) - Sunoco LP (SUN), a master limited partnership that operates 1,345 convenience stores and retail fuel sites, announced Thursday that it entered into a definitive asset purchase agreement for the sale of a majority of its convenience stores to 7-Eleven, Inc. Total consideration is $3.3 billion in cash plus fuel, merchandise and other inventories.

In pre-market activity, Sunoco shares were gaining 4.7 percent to $24.98.

This transaction is subject to regulatory clearances and customary closing conditions and is expected to close by the fourth quarter 2017.

SUN expects to use the proceeds to repay indebtedness and for general partnership purposes.

Under the deal, the company will sell approximately 1,110 convenience stores in 19 geographic regions primarily along the East Coast and in Texas, and the associated trademarks and intellectual property of the Laredo Taco Company and Stripes.

As part of the transaction, SUN will enter into a 15-year take-or-pay fuel supply agreement with a 7-Eleven subsidiary under which SUN will supply approximately 2.2 billion gallons of fuel annually. This supply agreement will have guaranteed annual payments to SUN, provides that 7-Eleven will continue to use the Sunoco brand at currently branded Sunoco stores and includes committed growth in future periods.

The company noted that about 200 convenience stores in North and West Texas, New Mexico and Oklahoma will be sold in a separate process. SUN's Aloha Petroleum business unit in Hawaii will continue to operate. The transaction does not include SUN's APlus franchisee-operated stores.

SUN President and Chief Executive Officer Bob Owens stated, "The sale of these retail assets to 7-Eleven is the beginning of an exciting evolution for SUN into a premier nationwide fuel supplier. 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."