ConocoPhillips signs agreement to sell Circle K
Posted: 7 October 2003
Proceeds from expected fourth quarter close will be used
to reduce debt
ConocoPhillips said it has signed an agreement with Alimentation
Couche-Tard Inc. for the sale of the capital stock of the Circle
K Corporation, which comprises 1,663 retail marketing outlets in
16 states and the Circle K brand, as well as the assignment of the
franchise relationship with more than 350 franchised and licensed
stores.
The transaction is subject to certain government and regulatory
reviews typically required of a transaction of this type. Closing
is expected in the fourth quarter.
"This agreement is a significant step toward the planned rationalization
of our downstream portfolio," said Jim Nokes, ConocoPhillips'
executive vice president of refining, marketing, supply and transportation.
"Completion of this sale will mark the beginning of a stronger
focus on our wholesale channels of trade. The sale of this business
and various retail marketing asset packages will enable us to reallocate
capital to projects that provide higher returns."
The transaction is not expected to result in any adjustment to
the previously recorded impairment provisions related to the company's
rationalization plan for its retail marketing assets. Operating
results related to the Circle K business will continue to be reflected
as discontinued operations until closing.
ConocoPhillips announced late last year that it would sell a substantial
portion of its retail marketing assets and exit certain geographic
regions. The company's international marketing assets are not included
in this effort. To date, the company has completed the sale of its
New York and New England marketing assets. Additional asset dispositions
are continuing.
Once the planned dispositions are complete, ConocoPhillips primarily
will focus on operating its wholesale business, but will retain
and operate approximately 300-350 retail outlets that complement
its refining and transportation network. These outlets will be located
primarily in the Central and West Coast regions of the United States,
and will utilize the company's three core brands: Conoco, Phillips
66 and 76.
As part of the agreement, ConocoPhillips will continue to supply
1.2 billion gallons of gasoline per year for the next two to five
years at market related pricing.
As a result of this transaction, ConocoPhillips expects its number
of employees to fall from approximately 55,800 to around 38,400
worldwide. It is expected that Alimentation Couche-Tard will rehire
the majority of displaced ConocoPhillips employees associated with
this transaction.
Credit Suisse First Boston acted as exclusive financial advisor
to ConocoPhillips in connection with the transaction.
Alimentation Couche-Tard Inc. is the leader in the Canadian convenience
store industry and the seventh-largest convenience retailer in North
America. The company operates a network of 2,575 convenience stores,
1,010 of which include gasoline dispensing and 165 of which have
restaurants. These stores are located in three large geographic
markets in Eastern, Central and Western Canada and in six Midwestern
states in the United States.
Couche-Tard employs about 20,100 people at its head office and
throughout its network of stores.
ConocoPhillips is an integrated petroleum company with interests
around the world. Headquartered in Houston, the company had approximately
55,800 employees, $81 billion of assets, and $105 billion of annualized
revenues as of June 30, 2003.
For more information see www.conocophillips.com.
Posted by Richard Price,
Editor Pipeline Magazine
Information supplied by companies
or PR agencies who are responsible for content. Send press releases
to info@pipelinedubai.com |
