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The acting chairman of the Federal Trade Commission said the $ 21 billion purchase of Speedway gas stations by the owner of the convenience store chain 7-Eleven may violate competition law.
Japanese retail giant Seven & Holdings agreed to buy the business – which has about 3,900 gas stations and convenience stores – Marathon Petroleum in a full cash deal last August, as it aimed to consolidate its position in the US market.
The bond would extend Seven & i’s push to the U.S. after buying $ 3.3 billion worth of parts from the Sunoco convenience store and gas station business in 2017. Adding Speedway would also expand its store market share. of American convenience from 5.9% to 8.5 percent, ahead of its nearest rival, the Canadian Alimentation Couche-Tard.
But in a statement Friday, Rebecca Kelly Slaughter, acting president of the FTC, and Rohit Chopra, Democratic commissioner of the FTC, said they were “extremely concerned” by the announcement of Seven & and, that same day, that the deal had closed despite the regulator’s ongoing investigation. and said they had “reasons to believe that this transaction is illegal.”
“In many local markets, the transaction is a monopoly merger or reduces the number of competitors from three to two,” they said in a statement.
Although the antitrust regulator had already spent “significant resources” investigating the transaction, it had not yet reached an agreement with the companies involved that would address their concerns, they said.
“Seven and Marathon’s decision to close in these circumstances is very unusual, and we are extremely concerned about that,” Slaughter and Chopra said.
Seven & i said Friday it had reached an agreement with FTC staff in late April, in which it pledged to dismantle 293 stores. The deal has not yet been signed by FTC commissioners.
“If approved, this solution will address all of the competitive concerns that commissioners refer to in their statement,” the company said. “We expect the commission to approve the negotiated settlement agreement in the short term.”
The deal for Speedway was concluded later previous talks between Seven & ii Marathon was broken due to a failure in the price agreement. Initially, the company had promised to pay $ 22 billion for Speedway operations, but agreed to a small 4.5% discount five months later.
Last year, Marathon said the deal would generate about $ 16.5 billion in after-tax revenue, which would go to pay off debt and return funds to shareholders.
Marathon came to an agreement after being pressured by activist investor Elliott Management, who in 2019 campaigned to dissolve the company to deal with the “chronic low performance” of its businesses. He had already announced plans to divert Speedway to an independent entity.
Marathon did not immediately respond to a request for comment on the statement.
The FTC will continue to investigate the transaction “to determine an appropriate way forward to deal with anti-competitive harm,” Slaughter and Chopra said in a statement. “The parties have closed their transaction at their own risk.”
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