7-Eleven's parent slurps up Sunoco stations for $3.3 billion

7-Eleven’s corporate parent, the Japanese company Seven & i Holdings, is gulping down a big U.S expansion.

Seven & i Holdings on Thursday said it would buy convenience stores and gas stations from Texas-based Sunoco for about $3.3 billion, as the Japanese retailer closes in on its goal to reach 10,000 North American outlets. The Sunoco stores are located in 18 states, including Florida and Texas as well as states in the Northeast and mid-Atlantic regions. 

The operator of the 7-Eleven chain of convenience stores has been aggressively opening stores in Japan as well as the United States, where it has been acquiring stores from local retailers. Its latest purchase comes as operators of traditional big-box retailers -- including some of Seven & i’s businesses -- have been suffering weak sales as changing tastes and modest wage growth have prompted shoppers to defect to cheaper speciality chains and online outlets.

“The U.S. convenience store market has growth momentum. We see opportunities there,” Seven & i President Ryuichi Isaka said at an earnings briefing after announcing the Sunoco deal.

Convenience store operators have benefitted from lower fuel prices, which is helping to bring more customers into their stores, the National Association of Convenience Stores said earlier this year. A survey of its members found most expect sales to rise in 2017. 

The deal will be the biggest ever for 7-Eleven, known for its Slurpee and Big Gulp beverages. As part of the agreement, 7-Eleven has agreed to buy fuel from Sunoco for 15 years, according to a statement from Seven & i. 

Seven & i runs general merchandise, department and speciality stores, but the bulk of its operating profit comes from convenience stores, or 86 percent of 364.6 billion yen ($3.29 billion) in the year through February.

In a statement, the firm said U.S. unit 7-Eleven has agreed to buy 1,108 Sunoco convenience stores and gas stations in August. The acquisition marks the second-biggest purchase of an American company by a Japanese business so far in 2017, following Takeda Pharmaceutical’s $4.66 billion purchase of Ariad Pharmaceuticals, according to Bloomberg News

Sunoco currently operates about 1,350 retail fueling sites and convenience stores under brands such as APlus and Stripes, the firm’s website showed. Most recently, 7-Eleven Inc acquired 79 stores in California and Wyoming from CST Brands Inc in July.

Seven & i has about 19,400 7-Eleven stores in Japan and 8,700 in the United States and Canada, including those run by franchisees. 7-Eleven Inc has said it aims to increase its number of stores to 10,000 over the three years through 2019.

In Japan, same-store sales in the year through February rose 1.8 percent at the 7-Eleven chain, but fell 4.2 percent at Seven & i’s Ito-Yokado general merchandise stores.

A Japanese company which is now part of Seven & i opened a 7-Eleven store as a regional licensee in 1974. The then-new retail concept became so successful in Japan that the company later bought out the U.S. owner of the convenience store chain.