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Petroleum industry

Exxon Mobil Sells East Coast Retail Assets to Tosco in $860 Million Deal

Strategic Insights

— 2 min read

Tosco, the largest independent refiner in the US, has announced a major deal with Exxon Mobil to purchase its entire package of East Coast retail assets, including 1,740 gasoline stations, for approximately $860 million. This deal is in line with the $850 million figure that some analysts were expecting. The acquisition is a result of Exxon Mobil's antitrust deal with the US Federal Trade Commission (FTC), which demanded the sale of East Coast assets to at most two buyers to guarantee a new presence in the market. Tosco will fund the deal with available cash and debt, without issuing additional equity.

Key Takeaways:

  • Tosco will purchase 1,740 gasoline stations from Exxon Mobil, including 686 owned or leased sites and 1,054 open-deal or branded distributor sites, for approximately $860 million.
  • The acquisition includes a distribution terminal in Virginia and the right to buy certain undeveloped sites.
  • The stations cover a vast territory from New York to Maine for Exxon's system and from New Jersey to Virginia for Mobil's system.
  • Tosco Chairman and Chief Executive Thomas D. O'Malley stated that the addition of the Exxon Mobil assets creates a powerful, high-quality retail system stretching from Maine to Florida.
  • Paine Webber analyst Chris Stavros said Tosco was an obvious favorite for the assets, as the deal satisfies both the FTC's requirements and Exxon Mobil's need to sell assets quickly.
  • Tosco operates two refineries on the East Coast with 450,000 barrels per day of capacity, which can supply "the lion's share" of gasoline to the new sites.
  • The deal is expected to add 15-20 cents per share to Tosco's annual profits.

Statistics:

  • 1,740 gasoline stations are being purchased by Tosco, including approximately 686 owned or leased sites.
  • The transaction price is approximately $860 million, in line with the $850 million figure expected by analysts.
  • The acquisition includes a distribution terminal in Virginia and the right to buy certain undeveloped sites.
  • 450,000 barrels per day of refining capacity will supply gasoline to the new sites.
  • Tosco operates 4,500 gasoline and convenience outlets throughout the US.
  • The deal is expected to add 15-20 cents per share to Tosco's annual profits.

Sources:

  • Bloomberg's report on Tosco's acquisition of Exxon Mobil's East Coast retail assets, citing Tosco Chairman and Chief Executive Thomas D. O'Malley.
  • Paine Webber analyst Chris Stavros' comment on the deal.
  • First business day: Thursday.

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