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* Seven & i unit to buy 1,108 stores in Texas, other states
* Sunoco to supply about 2.2 bln gallons of fuel to 7-Eleven
* Proceeds will be used primarily to repay debt - Sunoco
* Sunoco shares jump as much as 24 pct
By Taiga Uranaka and Vishaka George
April 6 Sunoco LP said on Thursday it
would sell 1,110 convenience stores to Japan's Seven & i
Holdings Co for $3.3 billion as the Texas-based company
shifts its focus to its fuel supply business.
Sunoco's shares jumped as much as 24 percent to $29.50 on
Thursday - their biggest intraday percentage rise in three
As part of the deal, the U.S. company will also supply about
2.2 billion gallons of fuel annually for 15 years to a unit of
the operator of 7-Eleven chain of convenience stores.
Sunoco, a publicly-traded partnership controlled by pipeline
operator Energy Transfer Equity, operates about 1,350
retail fuelling sites and convenience stores under brands such
as APlus and Stripes, the company's website showed.
The company said it planned to sell another 200 stores by
the end of the fourth quarter and expand its distribution
business, partly through acquisitions.
Energy Transfer's chief financial officer, Thomas Long, said
there are no plans to dissolve the partnership.
Energy Transfer wants Sunoco to remain a standalone business
and continue on the M&A front to expand its business, Long said.
"That is very much the directive."
Sunoco said it expected to use the proceeds from the sale
primarily to repay debt, which was about $4.51 billion as of
7-ELEVEN'S U.S. PUSH
Seven & i Holdings has been aggressively expanding in Japan
and the United States, where it has been acquiring stores from
Its latest purchase comes as operators of traditional
big-box retailers, including Seven & i, have been suffering weak
sales as changing tastes and modest wage growth prompt shoppers
to defect to cheaper speciality chains and online outlets.
"The U.S. convenience store market has growth momentum. We
see opportunities there," Seven & i President Ryuichi Isaka
Seven & i runs general merchandise, department and
speciality stores, but the bulk of its operating profit comes
from convenience stores.
The deal would be the biggest by the Japanese company's U.S.
unit 7-Eleven Inc.
Seven & i has about 19,400 7-Eleven stores in Japan and
8,700 in the United States and Canada, including those run by
7-Eleven Inc, known for its "Slurpee" frozen beverage, has
said it aims to increase its number of stores to 10,000 over the
three years through 2019.
(Reporting by Taiga Uranaka; Additional reporting by Ritsuko
Shimizu, Chris Gallagher and Gary McWilliams; Editing by
Christopher Cushing, Martina D'Couto, Saumyadeb Chakrabarty and