Seven & i Holdings Co., the world's largest convenience store operator by number of stores, announced Monday that it will acquire Speedway, the convenience store and gas station chain of U.S. oil refiner Marathon Petroleum Corp., for 21 billion dollar (about 2.2 trillion yen) in cash.
In the United States as well, Seven & i is the largest convenience store operator with about 9,000 7-Eleven stores. By acquiring Speedway, the third-largest in the industry in the United States with about 4,000 stores, the Japanese company intends to further strengthen its position over rivals.
As there is no major overlap in the U.S. regions in which Seven & i and Speedway operate, the acquisition is expected to allow the Japanese company to reduce purchasing and delivery costs through the increase in store numbers.
In term of the purchase price, this acquisition is among the biggest ever for a Japanese company buying an overseas firm, following Takeda Pharmaceutical Co.'s acquisition of major Irish drugmaker Shire PLC at 6.9 trillion yen, SoftBank Group Corp.'s purchase of major British chip designer ARM Holdings PLC at 3.3 trillion yen and Japan Tobacco Inc.'s purchase of fellow tobacco company Gallaher Group PLC at 2.2 trillion yen, according to Recof Corp.
"This is a once-in-a-lifetime chance in North America where robust growth is expected," Seven & i President Ryuichi Isaka said during a conference call on Monday. "It will be a big step forward to becoming a global retailer centering on the convenience store business."
The group's most profitable segment, Seven-Eleven convenience stores in Japan, has had difficulty growing significantly as the number of stores has swollen to about 21,000 nationwide. The segment's performance has also been hit by the novel coronavirus outbreak. The consolidated sales for the March-May period was 1.39 trillion yen, down 12.8% from a year earlier. For the full year, the unit saw its revenue and profit fall, posting a 73.2% plunge in net income to 13.9 billion yen.
Seven & i started exclusive negotiations to acquire Speedway this spring, but the negotiations had stalled over the purchase price. However, the Japanese company decided to accelerate efforts to shore up overseas operations as the impact of the pandemic is likely to be prolonged.
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