DALLAS–Energy Transfer Partners has purchased the Susser Holdings Corp. in a deal valued at $1.8 billion. The deal, which was announced Monday morning by executives of both ETP and Susser, will give ETP 11 million SUSP common units as well as the company's retail portfolio, which consists of 630 convenience store locations.
The combination will significantly increase ETP's portfolio, moving it west of the Mississippi River and giving it a very strong presence in Texas. ETP owns the Sunoco brand. Corpus Cristi, TX-based Susser owns the Stripes brand, which includes 630 company operated locations, 90 dealer operated sites and 526 dealer and distributor operated locations. This merger will add 1,246 sites to Sunoco's 5,152 locations.
“It significantly diversifies our retail business, geographically,” said Jamie Welch, group CFO and head of corporate development for ETE, during the investor call. “We are east of the Mississippi and now we end up with a very strong platform in Texas and the surrounding states.”
The merger also helps position ETP more firmly in the market around the Gulf of Mexico.
“As we looked across the dynamic on the retail space, we looked at Susser's business model to capitalize on the strong economy and favorable demographic trends in Texas. It was a bet on Texas; that was a bet we very much take, and take daily,” Welsh said.
In addition to the current sites that will be added to the ETP portfolio, Susser also has a number of development sites and future locations in the works.
“Susser one of the largest brands in the fast-growing Southwest market,” said Bob Owen, president and CEO of Sunoco, in the investor call. “One of the things we found most attractive was the land bank that they had for new sites for development over the next couple years and that is certainly activity that we continue with going forward.”
The merger is expected to close in the third quarter of 2014.
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