Back to top

Image: Bigstock

Will Marathon (MPC) Divest Speedway to Canada's Couche-Tard?

Read MoreHide Full Article

Per the Wall Street Journal, Marathon Petroleum Corporation (MPC - Free Report) is holding discussions with prospective buyers of its Speedway gas station unit. The Canadian convenience store chain Alimentation Couche-Tard, which operates about 14,800 convenience stores worldwide including 10,000 in North America, is considered one of the potential purchasers of the gas unit. 

According to the news source, the company is yet to disclose the deal value but based on the last fall, Speedway is estimated between $15 billion and $18 billion.

Notably, last week, Marathon Petroleum announced plans to defer its Speedway gas business spin-off to early 2021, per a filing with the U.S. Securities and Exchange Commission. The separation, initially scheduled to take place by the end of 2020, is being postponed due to coronavirus-led market turbulence.

Notably, this Findlay, OH-based leading independent refiner, transporter and marketer of petroleum products is working toward establishing the largest-U.S. listed convenience store operator by splitting Speedway from its parent platform into an independent publicly traded company.

However, over the past few months, the oil and gas industry has been in disarray, thanks to the coronavirus pandemic that crippled most sectors until now. Global fuel demand is visibly depressed in the aftermath of large-scale travel restrictions imposed globally. As a result, the outlook for all industries in the energy sector remains dull. In fact, the pandemic-borne uncertainty was behind the breakdown in negotiations with the Japanese retail group Seven & i Holdings, which was interested in acquiring Speedway branded gas stations but later backed off.  

Based on the impact of the pandemic on market conditions, Marathon Petroleum continues to assess the timeline for the Speedway sell-off. Management further stated that the separation remains contingent on its board of directors’ final approval.

Shares of this currently Zacks Rank #3 (Hold) company have plunged more than 24% over the past year, underperforming its closest refining peers Phillips 66 (PSX - Free Report) , which has lost 17%, Valero Energy Corporation (VLO - Free Report) , which has declined 23.3% and Murphy USA (MUSA - Free Report) , which has gained 37.8%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Today's Best Stocks from Zacks

Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.

This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.

See their latest picks free >>

Published in