Hess stations to get Speedway label after deal, but toy trucks drive on for the holidays
FINDLAY, Ohio - The Hess name will disappear from gas station signs after a $2.87 billion deal to sell the chain to Marathon Petroleum's Speedway, but the holidays will still see the popular Hess toy truck.
The deal gives Marathon Petroleum the retail operations of Hess, the largest chain of company-operated gas stations and convenience stores on the East Coast. The Hess stations will all be rebranded as Speedway over three years, the company said.
It also keeps the Hess toy truck on holiday wish lists â€” as they will still be sold at Hess retail stores and online this year. Starting in 2015, Hess plans to sell the toy trucks online.
Hess said this year will mark the 50th anniversary of the toy trucks, an institution on the East Coast, where TV commercials promoting each year's entry are commonly seen.
The deal, which is being orchestrated under subsidiary Speedway LLC, will expand Marathon Petroleum's retail operations from nine states to 23 states along the coast and in the Southeast.
Hess Corp. has been reshaping itself as a pure production and exploration company since coming under pressure from hedge fund Elliott Capital Management in 2013. It said last year it would seek a buyer for its retail operations.
Hess will use proceeds from the sale for additional stock buybacks. The company boosted its existing share repurchase authorization to $6.5 billion from $4 billion.
The deal announced Thursday consists of $2.37 billion in cash, an estimated $230 million of working capital and $274 million of capital leases. The transaction includes all of Hess' retail locations, transport operations and shipper history on various pipelines, including approximately 40,000 barrels per day on Colonial Pipeline that runs from New York to Houston.
"With this significant geographic expansion, we will be able to further leverage our integrated refining and transportation logistics operations, providing an outlet for an incremental 200,000 (barrels per day) of assured sales from our refining system," Marathon Petroleum CEO Gary Heminger said.
Marathon Petroleum Corp. is itself part of an earlier split in the energy sector in 2012, when Marathon Oil Corp. broke off its refining division so that it could focus on exploration and production.
Shares of Hess gained $1.65 to $90.95 in morning trading, while Marathon Petroleum's stock rose $1 to $88.69.
The acquisition is expected to close late in the third quarter.
Read more Business News
- Crash driver allegedly impairedKelowna - 2:57 pm
- Vibey is home!Kelowna - 4:44 pm
- $50M for rail corridorCentral Okanagan - 1:38 pm
- Fruitful weatherCentral Okanagan - 12:56 pm
|QHR Technologies Inc||1.21||0.00|
|Anavex Life Sciences||0.26||0.00|
|Copper Mountain Mining||2.88||-0.04|
|Sunrise Resources Ltd||0.025||-0.005|
|Mission Ready Services||0.215||-0.015|
Establishing a joint account may seem like a great strategy at first glance. However, there are many factors that must be considered before taking this action. This article will explore the use of &ls...
Let’s face it; nobody wants to pay for legal services if they do not have to, but if you have been injured in an accident you may have thought about hiring a lawyer to help you navigate your cla...
My screen printing business, like many others, started as a one-man operation. It was located in a small building, not much better than a shack, with a telephone, a big table where I ate lunch and (oc...