7-Eleven Will Acquire Speedway Gas Station In The United States

Illustration. (Photo: Unsplash)

JAKARTA - 7-Eleven retail franchise owner, Seven & i Holdings Co, will acquire the Speedway Fuel Filling Station (SPBU) in the United States (US) with a total value of 21 billion United States (US) dollars. The purpose of this acquisition is to increase the company's business growth amid economic uncertainty due to the corona virus pandemic or COVID-19.

Quoting Bloomberg, Monday, August 3, the acquisition transaction will be paid in cash and partly financed using debt. The deal will add about 3,900 stores which will bring the total 7-Eleven stores to 14,000 in the US and Canada.

This is the second-largest acquisition deal this year and the largest for Seven & i, which is a retail giant with 69,000 stores worldwide. Their outlets include 7-Eleven and Ito-Yokado supermarket in Japan.

Seven & i spent 3.3 billion three years ago buying Sunoco gas stations and convenience stores in an effort to expand its market in the United States (US).

"This is a historic first step as we strive to become a global retailer," said Seven & i Holdings Chief Executive Officer Ryuichi Isaka.

Seven & i, headquartered in Tokyo, Japan, explored a deal earlier this year to buy Speedway, which is the second largest US business chain in the retail fuel sector. However, at that time it was delayed because the bid value reached 22 billion US dollars.

Ryuchi Isaka has overseen the restructuring of Seven & i's expansion since taking over the leadership in 2016, with a focus on expanding the Americas.

Seven & i has been pressured by the saturated Japanese market conditions as well as a tight labor market making the retail business even more challenging.

"The Japanese convenience store market is at its limit as we age. There will be a short term impact from COVID-19 in the United States but the long-term population there will continue to grow," said logistics analyst and author of a book on the Japanese convenience store industry, Hiroaki Watanabe.

North America accounted for about 40 percent of Seven & i's sales in 2020, up from about a third five years ago. Meanwhile, the number of Speedway stores has tripled since 2011 in 36 states.

Seven & i will also raise about US $ 1 billion by selling US stores following the acquisition deal.