In a move on shifting focus beyond Japan, Seven & i Holdings Co Ltd is going to acquire Speedway gas stations from Marathon Petroleum Corp in U.S. for $21 billion after the deal intermission amid the coronavirus pandemic.
This acquisiiton is going to be one of the biggest deal of 2020 and contrary to situation in which the companies are focusing on shielding balance sheets but not expanding the businesses because of the financial crisis caused by pandemic.
Seven & i Holdings stores and supermarkets are facing the impact of a shriking population, less potential in economic growth and higher price competition.
The acquisition deal will boost number of Seven & i Holdings 7-Eleven store in U.S. and Canada to about 14,000. Thwe company added the stores in U.S. and Canada three ago when it purchased Sunoco LP (SUN.N) assets for $3.3 billion and extended with Canada’s Alimentation Couche-Tard Inc (ATDb.TO).
Following the announcement th shares of Seven & i fell about 5% in Tokyo as investors reacted over the revised price is just $1 billion lower than the turned down price in March. While investors of Marathon showed optimism in the latest develoment as the Marathon’s NYSE listed stock rose about 10%.
Analysts and investors think the price is still too high considering slow activities amid pandemic. More people started working from home and decline in travel has caused the fall in Oil prices and fuel consumption this year.
According to President Ryuji Isaka of Seven & i, the company’s expansion in the United States was still gives an advantage considering the growing population and economy, in spite of pandemic impact on consumer spending. He said, “The coronavirus is not going to go on forever.” However, the company didn’t tell specifically about the turning back to table for deal but added, ‘We made the management decision that these assets will be a source of our growth in five years, 10 years down the road.”
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