2018 Year-End Report: Top 6 M&A Stories

CHICAGO -- On the convenience-store mergers-and-acquisitions front, several big or high-profile chains gained new owners in 2018 or are in the process of changing hands, representing a major reset of the c-store industry chessboard.

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Here’s a look at some of 2018’s biggest deals as the year unfolded …

The year began with 7-Eleven Inc. completing its biggest acquisition to date, closing in January on an asset purchase agreement with Sunoco LP, Dallas. As part of the $3.3 billion deal with Sunoco, announced in April 2017, Irving, Texas-based 7-Eleven acquired approximately 1,100 of Sunoco’s company-operated convenience stores in 19 geographic regions.

7-Eleven is No. 1 in CSP’s 2018 Top 202 ranking of U.S. c-store chains by number of company-owned retail outlets.

7-Eleven’s acquisition of Sunoco’s sites in Texas, New York, Florida and other states took advantage of Sunoco’s shift in focus away from retail and toward wholesale fuel. Sunoco retained approximately 80 sites, including its APlus franchisee-operated c-stores along the New Jersey and New York toll roads and its Aloha Petroleum business unit in Hawaii.

In April 2018, a new company, Cal’s Convenience Inc., based in Frisco, Texas, acquired Sunoco's approximately 200 Stripes-branded c-stores in West Texas, New Mexico and Oklahoma that were not part of the deal between Sunoco and 7-Eleven. Sunoco had acquired these sites from Susser Holdings Corp. in 2015.

In February, supermarket and c-store retailer The Kroger Co., Cincinnati, announced the sale of its 762-unit c-store network to EG Group, a privately held petroleum European forecourt c-store retailer based in Blackburn, United Kingdom, for $2.15 billion. The deal closed in April.

With one deal, EG Group became a major player in the U.S. convenience retailing business and took Kroger’s place at No. 10 on CSP’s 2018 Top 202 ranking.

EG Group, which has a large network in the United Kingdom and Europe, previously had no U.S. retail presence. It has established its North American headquarters in Cincinnati and promoted Jay Erickson, president of the Tom Thumb and Turkey Hill Minit Markets c-store chains, to president of EG America LLC, succeeding the departing Jeff Parker. The company will continue to operate the stores under their current banners, which include Quik Stop, Kwik Shop, Loaf 'N Jug, Turkey Hill and Tom Thumb.

Kroger’s sale of the c-store network is part of its new Restock Kroger strategy to focus on grocery “to redefine the food and grocery customer experience in America.” The company has also created a partnership with Deerfield, Ill.-based The Walgreens Co. to pilot Kroger Express, a grocery section in Walgreens drugstores.

In April, Marathon Petroleum Corp. announced a $23.3 billion merger agreement with Andeavor. The deal closed in October.

The combination leverages the two refiner-marketers’ complementary geographies. The company is the No. 1 U.S. refiner by capacity and a top-five refiner globally.

The transaction also creates a nationwide marketing portfolio, combining Findlay, Ohio-based Marathon Petroleum's strength east of the Mississippi with San Antonio-based Andeavor’s strong presence in the western United States. The retail and marketing business includes approximately 3,900 company-owned and -operated stores and 7,800 Marathon-branded locations. Enon, Ohio-based Speedway LLC, a Marathon Petroleum subsidiary, owns and operates approximately 4,000 convenience stores across the United States. Speedway is No. 3 in CSP's 2018 Top 202 ranking.

Marathon Petroleum said in October that it is rebranding the 285 SuperAmerica c-stores it acquired from Andeavor to the Speedway brand.

In September, EG Group announced its second U.S. transaction, saying that it will acquire TravelCenters of America LLC’s Minit Mart convenience-store business for approximately $330.8 million. The companies expected the sale, involving 225 stand-alone locations, to be completed in fourth-quarter 2018.

Following its purchase of Kroger’s 762-unit c-store network, this deal with TravelCenters of America has cemented EG Group’s place in the top 10 U.S. c-store chains.

At the same time, Westlake, Ohio-based TravelCenters of America opened its first four travel centers under its new TA Express smaller-format brand. TravelCenters of America is No. 16 on CSP’s 2018 Top 202 ranking.

Two venerable family-owned convenience-store chains ended up being sold in 2018.

The first was Ricker Oil, the Anderson, Ind.-based chain of 56 c-stores in the Hoosier State. Supermarket and convenience-store retailer Giant Eagle Inc., rather than divest its c-stores like Kroger, instead in September announced that it will acquire the Ricker’s chain to complement its approximately 200-unit GetGo c-store chain and enhance its presence in Indiana.

The companies expected the transaction to close by the end of the year.

Pittsburgh-based Giant Eagle’s GetGo division is No. 39 on CSP’s 2018 Top 202 ranking. Ricker’s, founded in 1979, is No. 117 in CSP’s2018 Top 202.

Jay Ricker, chairman of the chain known as a foodservice and technology innovator, said Giant Eagle approached him about a deal. With retirement in mind, the offer “made too much sense to turn it down,” he told the Indiana Business Journal.

The second sale of a longtime family-owned convenience-store chain was that of Thorntons Inc., Louisville, Ky., to a new joint venture between BP and energy-focused private-equity firm ArcLight Capital Partners, Boston.

Oil Price Information Service (OPIS) first reported in May that Thorntons was looking at a sale.

Founded in 1971, Thorntons operates 191 c-stores in six states: Florida, Illinois, Indiana, Kentucky, Ohio and Tennessee. It is No. 42 on CSP's 2018 Top 202 ranking. London-based BP is No. 8 on CSP's 2018 Top 202 ranking.

“We know this new joint venture will help us to accelerate store growth and serve even more guests every day,” said Matt Thornton, chairman and CEO of Thorntons. “We are excited to begin this new chapter and are pleased that we are able to take these next steps in our hometown working with our existing team.”