Delek US Holdings, Inc. (NYSE:DK) (“Delek”) and FEMSA (NYSE:FMX) have entered into a definitive agreement, whereby a subsidiary of FEMSA will acquire 100% of the equity interests in the Delek subsidiaries that operate Delek’s retail business (“Delek US Retail”) for cash consideration of $385 million, including the purchase of inventories.
Delek US Retail is a leading convenience store chain with 249 corporate stores operating primarily in the southwestern United States including locations in Texas and New Mexico. Delek operates company stores under the DK brand. Although Delek previously used the “DK” name for both its fuel and retail brands, the two are now separate. The DK and Alon Fuel brands remain wholly owned by Delek and continue to operate independently of FEMSA. FEMSA is one of the largest conglomerates in Mexico with operations in over 17 countries. Through FEMSA’s Proximity & Health Division it operates OXXO; the largest small-format proximity store operator in the Americas with over 22,800 stores in 5 countries, including Mexico, Colombia, Chile, Peru and Brazil. While DK Retail stores are now being rebranded to OXXO, all sites continue to carry DK Fuel or Alon Fuel at the pump through a branded supply agreement, making FEMSA a current fuel customer of Delek.
José Antonio Fernández Garza-Lagüera, CEO of FEMSA’s retail operations, commented: “At FEMSA, we have a long-held ambition to enter the US convenience and mobility industry, and this transaction represents the ideal way for us to take our first step in this compelling market. We have been building and expanding our retail operation in Mexico for over 45 years, eventually reaching ten other countries in South America and Europe, and a store base of more than 30,000 locations. As we welcome our new DK colleagues into the FEMSA family, we are excited to embark on this new and important journey together.”
Avigal Soreq, President, and Chief Executive Officer of Delek, said, “The sale of Delek US Retail to FEMSA is an incremental step in our commitment to unlock the sum of the parts value inherent in our system. We are pleased with this transaction and expect to execute on additional steps to unlock value for our stakeholders. Importantly, it allows us to gain a competitive partner for ongoing and expanded retail fuel sales. We look forward to building on this partnership with FEMSA in both the short and long-term. The transaction creates an exciting opportunity for Delek US Retail and its employees as they become part of FEMSA’s growth strategy in the United States.”
Read the original press release here, published on August 1, 2024.