Japan-based Seven & i Holdings Co. Ltd., the parent company for 7-Eleven stores, has agreed to divest and sell some of its chain of stores in its proposed acquisition of $3.3 billion for 1,100 Sunoco LP outlets, announced the Federal Trade Commission on Friday.
Under the consent agreement terms, 7-Eleven is to sell 26 of its retail fuel outlets that it already owns to Sunoco, and Sunoco would retain 33 of the fuel outlets that otherwise 7-Eleven would have acquired.
The federal agency said that without these sales taking place, the acquisition would hurt competition in 20 metropolitan areas across 76 local markets and possibly result in prices increasing. This deal between 7-Eleven and Sunoco was first announced back in April of 2017.
In addition, the FTC said that without its conditions, 7-Eleven would hold a monopoly in certain markets. This deal will help to preserve the competition, as Sunoco will be converting its stations that it retained as well as those it acquired from 7-Eleven from sites that were company owned to one that independent operators will run.
The remedy preserves the competition the way it exists today, to ensure that the divestiture assets are going to a largescale viable competitor and that they lower the costs and risks associated with the asset integration, said the FTC.
The network of 7-Eleven stores in the U.S. includes 8,500 stores across 35 states, with over 1,000 of them company operated.
Without the divestitures the FTC said that several places would have markets that would now be uncompetitive including in areas of Buffalo, New York; Boston, Mass; Miami, Florida; Fort Myers, Florida; Richmond, Virginia; and the Washington, D.C. metropolitan area.
Under this new agreement reached, 7-Eleven must give notice for a period of 10 years of plans in acquiring additional outlets across the 76 different local areas.
Sunoco announced it would be selling 1,000 of its convenience stores in the U.S. to 7-Eleven so it could focus on its business of fuel supply. In November, Sunoco said during one of its earnings calls that it hoped the transaction would be closed prior to the end of 2017, but said that it might be pushed back into the 2018 first quarter but depended upon the reviews being made by regulators.