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Sunoco LP announces strategic divestiture of convenience stores in Continental United States

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LP has announced that it entered into a definitive asset purchase agreement for the sale of a majority of its convenience stores to , Inc. (“”).

Sunoco LP announces strategic divestiture of convenience stores in Continental United States
Sunoco expects to use the proceeds to repay indebtedness and for general partnership purposes

Total consideration in the transaction is US $3.3 billion in cash plus fuel, merchandise and other inventories. Sunoco expects to use the proceeds to repay indebtedness and for general partnership purposes.

President and Chief Executive Officer, Sunoco, stated, “The sale of these retail assets to 7-Eleven is the beginning of an exciting evolution for Sunoco into a premier nationwide fuel supplier. Our supply agreement with 7-Eleven provides Sunoco with a predictable long-term income stream, and this transaction quickly allows Sunoco to improve its financial profile.”

Assets being sold to 7-Eleven include approximately 1,110 convenience stores in 19 geographic regions primarily along the East Coast and in Texas, and the associated trademarks and intellectual property of the Laredo Taco Company and Stripes. As part of the transaction, Sunoco will enter into a 15-year take-or-pay fuel supply agreement with a 7-Eleven subsidiary under which Sunoco will supply approximately 2.2 billion gallons of fuel annually. This supply agreement will have guaranteed annual payments to Sunoco, provides that 7-Eleven will continue to use the Sunoco brand at currently branded Sunoco stores and includes committed growth in future periods.

Approximately 200 convenience stores in North and West Texas, New Mexico and Oklahoma will be sold in a separate process. Sunoco’s Aloha Petroleum business unit in Hawaii will continue to operate its highly efficient and integrated business model within Sunoco. Likewise, the transaction does not include Sunoco’s highly successful APlus franchisee-operated stores.

Sunoco’s transaction with 7-Eleven is the first step in Sunoco’s strategic shift away from company-operated convenience stores to focus on its industry-leading fuel supply business. Led by the iconic Sunoco fuel brand and successful APlus franchise, Sunoco plans to be a leading consolidator in the domestic wholesale fuels business, supplying fuel to a network of more than 8,900 locations of third-party dealers, distributors and other commercial customers, with an enhanced focus on MLP qualifying income. Additionally, the proceeds received in this transaction will be used to further enhance Sunoco’s credit profile and leverage profile.

This transaction is subject to regulatory clearances and customary closing conditions and is expected to close by the fourth quarter 2017.

J.P. Morgan Securities LLC (“JP Morgan”) served as Sunoco’s exclusive financial advisor for the transaction. In addition, Sunoco has retained JP Morgan to market the approximately 200 remaining convenience stores in North and West Texas, New Mexico and Oklahoma.