Sunoco (SUN) has officially declared a firm commitment to sell 204 convenience stores to 7-Eleven for an estimated $1bn.
Additionally, SUN has expressed its plans to acquire liquid fuels terminals situated in Amsterdam, Netherlands, and Bantry Bay, Ireland, from Zenith Energy.
SUN finalised a definitive agreement with 7-Eleven for the sale of 204 convenience stores situated in West Texas, New Mexico, and Oklahoma. The transaction, valued at approximately $1bn, includes standard adjustments for fuel and merchandise inventory.
As part of this arrangement, SUN will also modify its existing take-or-pay fuel supply agreement with 7-Eleven, integrating additional fuel gross profit.
The proceeds from this sale will enable SUN to significantly reduce leverage, facilitating the pursuit of future growth opportunities while maintaining a robust balance sheet and supporting multi-year distribution growth. The completion of the transaction is contingent upon receiving regulatory approvals and fulfilling customary closing conditions, and it is anticipated to close promptly.
SUN has also declared its intent to acquire the entire equity interest in Zenith Energy Netherlands Amsterdam, encompassing liquid fuels terminals in Amsterdam, Netherlands, and Bantry Bay, Ireland.
The execution of the definitive purchase agreement and the disclosure of the purchase price will follow the completion of the requisite Dutch works council consultation and information processes, which are currently in progress.
The strategic positioning of the Amsterdam terminal in the Port of Amsterdam, a global energy market hub and Europe’s largest refined product trading port, adds significance. Meanwhile, the Bantry Bay terminal, the largest independent bulk liquids storage facility in Ireland, plays a crucial role in storing Ireland’s strategic oil reserve.
This acquisition aims to optimise supply for SUN’s existing East Coast business, aligning with SUN’s commitment to expanding its portfolio of stable midstream income. SUN anticipates that this complementary acquisition will enhance unit-holder value within the first year of ownership and will be financed through available funds under SUN’s revolving credit facility. The transaction is slated to conclude in the first quarter of 2024, contingent upon meeting customary closing conditions.
SUN maintains its previously disclosed 2024 EBITDA guidance range of $975m to $1bn, without any alterations.
