(Bloomberg Opinion) — Investors in the retail sector can’t get their fill of gas stations.
Seven & i Holdings Co., the Japanese company that controls 7-Eleven, is in exclusive talks to acquire Marathon Petroleum Corp.’s Speedway gas stations for about $22 billion, people familiar with the matter told Scott Deveau, Kiel Porter and Manuel Baigorri of Bloomberg News.
That’s not the only deal out there. EG Group, a closely held U.K. forecourts operator that had also shown an interest in Speedway, this week offered A$3.9 billion ($2.6 billion) in cash for the gas stations owned by Caltex Australia Ltd.
Alimentation Couche-Tard Inc. is also bidding for Caltex’s entire business, including its refinery and fuel distribution unit as well as the retail gas-station network. Couche-Tard, Seven & i, and Berkshire Hathaway Inc. went on a similar spree for U.S. fuel retailers, truck stops and convenience stores in 2017.
The argument for these deals is quite straightforward. Grocery retail for several decades has been shifting away from the stereotype of large nuclear families doing weekly shopping trips in big-box supermarkets, toward individuals, working parents and retirees picking up a few things from a local convenience store several times a week.
If you’re looking to expand into convenience stores, gas stations are a target-rich environment — scattered through urban areas and along major highways, and ripe for upgrading beyond their traditional fare of basic fuel for vehicles and their drivers. In the meantime, the constant need to fill up gas tanks provides a reliable stream of cash, although one that’s highly leveraged to the price of oil.
Seven & i hopes to echo the revival of its domestic business by offering a wider range of products and fresh food to customers. EG Group, which has…
Source: FuelFix
