TOKYO -- Japan's retail giant Seven & i Holdings has dropped its plan to acquire the Speedway gas station chain in the U.S. for about $22 billion, Nikkei has learned.
Speedway, a division of U.S. petroleum refiner Marathon Petroleum operates about 4,000 gas stations in the country that are paired with convenience stores.
Seven & i, operator of the 7-Eleven convenience store chain, had previously hoped to expand its U.S. business as a pillar of growth due to a lack of prospects domestically.
Seven & i made the decision in a board meeting on Thursday, according to several sources involved in the negotiation between Seven & i and Marathon Petroleum. The biggest hurdle for the acquisition was the price which was deemed too high by the Japanese company.
There was a risk of incurring a large loss if Speedway's revenue did not go up as expected after the acquisition. Moreover, physical retail outlets could decline in the future as online shopping expands. Seven & i declined to comment.
In 2005, U.S.-based Seven-Eleven became a wholly-owned subsidiary of Seven & i. In January 2018, the U.S. unit acquired 1,030 convenience stores from Texas-based Sunoco LP for about $3.1 billion. As of November 2019, it operated about 9,000 stores.
Seven-Eleven has the most outlets of all convenience store operators counts in the U.S., followed by Canada's Alimentation Couche-Tard with 8,000 stores, and Speedway, according to consulting company AlixPartners. The acquisition was expected to dramatically push up Seven & i's market share.