FINDLAY, Ohio, Aug. 2, 2020 /PRNewswire/ -- Marathon Petroleum
Corp. (NYSE: MPC) today announced that it and certain of its
subsidiaries have entered into a definitive agreement with
7-Eleven, Inc., a wholly owned, indirect subsidiary of Seven &
i Holdings Co., Ltd. (3382: Tokyo), whereby 7-Eleven will acquire Speedway
for $21 billion in cash. The
transaction is expected to close in the first quarter of 2021,
subject to customary closing conditions and regulatory
approvals.
"This transaction marks a milestone on the strategic priorities
we outlined earlier this year," said Michael J. Hennigan, president and chief
executive officer. "Our announcement crystalizes the significant
value of the Speedway business, creates certainty around value
realization and delivers on our commitment to unlock the value of
our assets. At the same time, the establishment of a
long-term strategic relationship with 7-Eleven creates
opportunities to improve our commercial performance."
Strategic Rationale:
- Certainty of Value for MPC Shareholders: The
$21 billion valuation represents a
significant value unlock. The 100% cash transaction immediately
captures value for MPC shareholders relative to potential valuation
risks of other alternatives.
- Significant After-Tax Cash Proceeds: This transaction is
expected to result in after-tax cash proceeds of approximately
$16.5 billion. MPC expects to use the
proceeds to both repay debt to protect its investment grade credit
profile and return capital to shareholders. Specific details will
be announced at the time of transaction close.
- Long-Term Relationship Drives Additional Value: The
arrangement includes a 15-year fuel supply agreement for
approximately 7.7 billion gallons per year associated with the
Speedway business. The company expects incremental opportunities
over time to supply 7-Eleven's remaining business as existing
arrangements mature and as 7-Eleven adds new locations in
connection with its announced U.S. and Canada growth strategy.
Approvals and Timing
The transaction has been
unanimously approved by the boards of directors of both companies.
The transaction is expected to close in the first quarter of 2021
and is subject to customary closing conditions, including clearance
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
Conference Call and Earnings Report
At 9:30 a.m. ET tomorrow, MPC will hold a conference
call and webcast to discuss 2020 second-quarter financial results
and provide an update on company operations. Interested parties may
listen by visiting MPC's website at
http://www.marathonpetroleum.com and clicking on the "Join the
Webcast" link. A replay of the webcast will be available on the
company's website for two weeks. Financial information, including
the earnings release and other investor-related material, will also
be available online prior to the conference call and webcast at
https://www.marathonpetroleum.com.
Advisors
Barclays acted as exclusive financial advisor
and Wachtell, Lipton, Rosen & Katz acted as legal advisor to
MPC. J.P. Morgan acted as independent financial advisor to the
Speedway transaction committee of MPC's Board of Directors.
About Marathon Petroleum Corporation
Marathon
Petroleum Corporation (MPC) is a leading, integrated, downstream
energy company headquartered in Findlay,
Ohio. The company operates the nation's largest refining
system. MPC's marketing system includes branded locations across
the United States, including
Marathon brand retail outlets. Speedway LLC, an MPC subsidiary,
owns and operates retail convenience stores across the United States. MPC also owns the general
partner and majority limited partner interest in MPLX LP, a
midstream company that owns and operates gathering, processing, and
fractionation assets, as well as crude oil and light product
transportation and logistics infrastructure. More information is
available at www.marathonpetroleum.com.
Investor Relations Contact: (419)
421-2071
Kristina Kazarian,
Vice President, Investor Relations
Taryn Erie, Manager, Investor
Relations
Brian Worthington, Manager, Investor
Relations
Media Contacts:
Hamish
Banks, Vice President, Corporate Communications (419)
421-2521
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
Forward-Looking Statements
This press release
contains forward-looking statements within the meaning of federal
securities laws regarding Marathon Petroleum Corporation (MPC).
These forward-looking statements relate to, among other things,
expectations, estimates and projections concerning the business and
operations, strategy and value creation plans of MPC. In accordance
with "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995, these statements are accompanied by cautionary
language identifying important factors, though not necessarily all
such factors, that could cause future outcomes to differ materially
from those set forth in the forward-looking statements. You can
identify forward-looking statements by words such as "anticipate,"
"believe," "commitment," "could," "design," "estimate," "expect,"
"forecast," "goal," "guidance," "imply," "intend," "may,"
"objective," "opportunity," "outlook," "plan," "policy,"
"position," "potential," "predict," "priority," "project,"
"proposition," "prospective," "pursue," "seek," "should,"
"strategy," "target," "would," "will" or other similar expressions
that convey the uncertainty of future events or outcomes. Such
forward-looking statements are not guarantees of future performance
and are subject to risks, uncertainties and other factors, some of
which are beyond the company's control and are difficult to
predict. Factors that could cause MPC's actual results to differ
materially from those implied in the forward-looking statements
include but are not limited to: with respect to the planned
Speedway sale, the ability to successfully complete the sale within
the expected timeframe or at all, based on numerous factors,
including our ability to satisfy customary conditions, including
obtaining regulatory approvals on the proposed terms and schedule,
and any conditions imposed in connection with the consummation of
the transaction, our ability to utilize the proceeds as
anticipated, and our ability to capture value from the associated
ongoing supply relationship and realize the other expected
benefits; the effects of the recent outbreak of COVID-19 and the
adverse impact thereof on our business, financial condition,
results of operations and cash flows, including, but not limited
to, our growth, operating costs, labor availability, logistical
capabilities, customer demand for our products and industry demand
generally, margins, inventory value, cash position, taxes, the
price of our securities and trading markets with respect thereto,
our ability to access capital markets, and the global economy and
financial markets generally; the effects of the recent outbreak of
COVID-19, and the current economic environment generally, on our
working capital, cash flows and liquidity, which can be
significantly affected by decreases in commodity prices; our
ability to reduce capital and operating expenses; the effects of
any divestitures on the business, financial condition, results of
operations and cash flows; future levels of revenues, refining and
marketing margins, operating costs, retail gasoline and distillate
margins, merchandise margins, income from operations, net income
and earnings per share; the regional, national and worldwide
availability and pricing of refined products, crude oil, natural
gas, NGLs and other feedstocks; consumer demand for refined
products; the ability to manage disruptions in credit markets or
changes to credit ratings; future levels of capital, environmental
and maintenance expenditures; general and administrative and other
expenses; the success or timing of completion of ongoing or
anticipated capital or maintenance projects; the reliability of
processing units and other equipment; business strategies, growth
opportunities and expected investment; share repurchase
authorizations, including the timing and amounts of such
repurchases; the adequacy of capital resources and liquidity,
including availability, timing and amounts of free cash flow
necessary to execute business plans and to effect any share
repurchases or to maintain or increase the dividend; the effect of
restructuring or reorganization of business components; the
potential effects of judicial or other proceedings on the business,
financial condition, results of operations and cash flows;
continued or further volatility in and/or degradation of general
economic, market, industry or business conditions as a result of
the COVID-19 pandemic, other infectious disease outbreaks or
otherwise; non-payment or non-performance by our producer and other
customers; compliance with federal and state environmental,
economic, health and safety, energy and other policies and
regulations, including the cost of compliance with the Renewable
Fuel Standard, and/or enforcement actions initiated thereunder; the
anticipated effects of actions of third parties such as
competitors, activist investors or federal, foreign, state or local
regulatory authorities or plaintiffs in litigation; the impact of
adverse market conditions or other similar risks to those
identified herein affecting MPLX; and the factors set forth under
the heading "Risk Factors" in MPC's Annual Report on Form 10-K for
the year ended Dec. 31, 2019, and in
Forms 10-Q and other filings, filed with the SEC. Copies of MPC's
Form 10-K, Forms 10-Q and other SEC filings are available on the
SEC's website, MPC's website at
https://www.marathonpetroleum.com/Investors/ or by contacting MPC's
Investor Relations office. Copies of MPLX's Form 10-K, Forms 10-Q
and other SEC filings are available on the SEC's website, MPLX's
website at http://ir.mplx.com or by contacting MPLX's Investor
Relations office.
We have based our forward-looking statements on our current
expectations, estimates and projections about our business and
industry. We caution that these statements are not guarantees of
future performance and you should not rely unduly on them, as they
involve risks, uncertainties, and assumptions that we cannot
predict. In addition, we have based many of these forward-looking
statements on assumptions about future events that may prove to be
inaccurate. While our management considers these assumptions to be
reasonable, they are inherently subject to significant business,
economic, competitive, regulatory and other risks, contingencies
and uncertainties, most of which are difficult to predict and many
of which are beyond our control. Accordingly, our actual results
may differ materially from the future performance that we have
expressed or forecast in our forward-looking statements. We
undertake no obligation to update any forward-looking statements
except to the extent required by applicable law.
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SOURCE Marathon Petroleum Corporation