Big-Time Investors Snagging JET Fuel Stations from Stressed Phillips 66
American organization equipped jet fueling stations with a silver coating
Let's talk about some juicy business moves! The US conglomerate, Phillips 66, is shedding its Jet fuel stations in Germany and Austria like a snake molts its skin. And guess who's snapping them up? None other than investment powerhouses Energy Equation Partners and Stonepeak, with a whopping 65% stake for a cool 1.5 billion euros!
This deal involves a total of 970 stations, about 843 of which are branded Jet. They'll keep getting their juice from the Phillips 66 MiRO refinery in Karlsruhe. The remaining 35% will remain in Phillips 66's grubby hands through a joint venture.
Why's Phillips 66 giving up so much real estate? To lighten their debt load and make their shareholders happy, they're using the sale proceeds. They plan to seal the deal in the second half of this year. Since the announcement, their stock's taken a 1% hit, dropping to $123.57. TD Cowen analysts called them out for not offloading all their stations.
Phillips 66's under pressure from Elliott, a pesky investment firm demanding changes like spiffing up their business units. With their annual general meeting coming up soon, they're staring down the barrel of supervisory board votes, and who knows what else.
Phillips 66 ain't the first oil giant to pawn off their gas stations in Germany. In 2017, Esso pumped their stuff to British retailer EG Group, and in 2022, OMV did the same. In 2023, the Canadian Alimentation got their grubby mitts on Total's fuel stations in Germany and the Netherlands for around 3.3 billion dollars.
Now, why should you care about all this? Well, the deal's strategic for the investors for several reasons:
- Long-term Customer Service: JET's assets are primed to serve customers reliably over the long haul, according to Anthony Borreca of Stonepeak.
- Market Dominance: JET's got a vice-like grip on the German and Austrian fuel markets, and these investment firms are eager to build on that foundation.
- Collaborative Partnership: The joint venture allows Phillips 66 to keep an eye on their territory while leveraging the investment and management prowess of Energy Equation Partners and Stonepeak.
- Big Bucks: The deal values JET at approximately €2.5 billion, offering a significant financial opportunity for the big spenders.
- Portfolio Diversification: This move aligns with the broader real asset strategies of Energy Equation Partners and Stonepeak, focusing on critical infrastructure and energy sectors, positioning them for long-term growth in key European markets.
The new owners, Energy Equation Partners and Stonepeak, are keen to build on JET's market dominance in the German and Austrian fuel markets, aiming to diversify their portfolios with long-term assets that offer reliable customer service and align with their focus on critical infrastructure and energy sectors in key European markets. With a substantial financial opportunity presented by the deal valued at approximately €2.5 billion, they will collaborate with Phillips 66 through a joint venture, thereby allowing Phillips 66 to maintain visibility in the territory while leveraging the investment and management expertise of the latter.
