M&A Fuels Growth in Gasoline and Industrial Mining Sectors

7-Eleven Inc, the premier name and largest chain in the convenience-retailing industry, recently announced that it has entered into an asset purchase agreement with Sunoco LP. As part of the agreement, 7-Eleven will acquire approximately 1,108 convenience stores located in 18 states.

The acquisition of Sunoco’s gasoline convenience stores sees an increased investment from the Japanese retail store owner Seven & i Holdings Co in the US. This is Seven & i’s most ambitious deal to date and follows the company-wide restructuring a year ago, when it announced plans that included divesting some of its department stores and boosting profits at 7-Eleven Inc. through increasing sales of private label products.

The deal will bring more than one thousand new gas stations and convenience stores to Texas and the Eastern US in a move that sets out to offer consumers greater convenience while improving 7-Eleven’s profitability. Sunoco’s retail unit reported a revenue of $7.7 billion in 2016.

This deal represents a long term investment, with 7-Eleven also committing to receive gasoline from Sunoco for the next 15 years and with a plan to grow the number of retail outlets to 10,000 stores by the year 2020.  It is estimated that Seven & i will show an increased operating profit of six per cent, to $3.5 billion for the 12 months ending February 2018.

The traditionally sluggish sectors of oil, gas and mining industries are starting to see a renewed revival across the globe, marked by Asian investment into overseas interests that is driving growth and development.

Gold rush

The Shandong Gold Mining Co, based in China, secured a 50 percent stake in Barrick Gold’s Valdero gold mine in Argentina, valued at $960 million. The company beat rival Chinese firm Zijin Mining Group Co to buy half the Veladero gold mine, owned by the Barrick Gold Corp, offering the Chinese mineral giant strong opportunity for growth in a new market.

Fuelling development

Looking at the wider industrial sector, Royal Dutch Shell is looking to divest some of its New Zealand portfolio, with the sale of its 50 percent stake in New Zealand’s second largest gas field, the Kapuni Gas Field, increasing their holding to 100 percent in the joint venture that operates the field. This is the first indication that Shell is reviewing its business interests in New Zealand, following the worldwide slump in energy prices.

Stay tuned to our blog for industry M&A news and updates, and get in touch with our experienced team with any questions you have about the mergers and acquisitions process and how Benchmark International can help you.