fbpx
Connect with us

Business

Hess Stations to be Renamed, but Trucks Roll On

Published

on

This Feb. 1, 2010 file photo shows a Marathon gas station pump in Indianapolis. Marathon Petroleum will spend $2.87 billion to acquire the retail operations of Hess, the largest chain of company operated gas stations and convenience stores on the East Coast, in a deal announced Thursday, May 22, 2014. (AP Photo/Michael Conroy, File)

This Feb. 1, 2010 file photo shows a Marathon gas station pump in Indianapolis. Marathon Petroleum will spend $2.87 billion to acquire the retail operations of Hess, the largest chain of company operated gas stations and convenience stores on the East Coast, in a deal announced Thursday, May 22, 2014. (AP Photo/Michael Conroy, File)

 

FINDLAY, Ohio (AP) — 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 — 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.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

SIGN UP TO RECEIVE NEWS UPDATES IN YOUR INBOX


Sign up to receive the latest news in your inbox

* indicates required

Like BlackPressUSA on Facebook

Advertisement

Advertise on BlackPressUSA

advertise with blackpressusa.com