US Conglomerate's Jet Fuel Stations Sold to Investment Firms: A Shrewd Move or a Giant Mistake?
American organization has coated jet refueling stations with silver
In the ever-changing world of business, nothing seems to stay constant. The famous adage, "When the going gets tough, the tough get going," seems to be a guiding principle for the Texan oil conglomerate, Phillips 66. Struggling to manage debt and eager to pump some much-needed cash into shareholders' pockets, Phillips 66 has decided to sell a majority stake, approximately 65%, of its Jet fuel stations in Germany and Austria.
The deal, which is reportedly worth around 1.5 billion euros, has caught the eyes of monetary wolves in the form of a consortium backed by none other than the influential investment firms, Energy Equation Partners and Stonepeak.
ThegetText-branded fuel stations in question number a sizable 970, with 843 operating under the iconic Jet brand. The good news for customers is that they will continue receiving fuel from the reliable Phillips 66 MiRO refinery in Karlsruhe.
Phillips 66 is planning to retain the remaining 35% stake through a new joint venture, ensuring a continued presence in the regional fuel market.
The financial windfall from this deal is intended to help Phillips 66 reduce its crippling debt and boost dividends for its loyal shareholders. The company has announced that the sale will likely be completed in the second half of the year.
The stock market seemed less than impressed with the news, as Phillips 66 shares slid 1% to $123.57 following the announcement. TD Cowen analysts, known for their sharp critique, voiced disappointment that Phillips 66 did not sell all the stations, hinting at missed opportunities.
The conglomerate is no stranger to pressure, especially from the powerful investment firm, Elliott, which had been demanding a series of changes, including potentially divesting certain business units. Amidst all this, the announcement of the sale came just days before the annual general meeting, where crucial decisions, including the composition of the supervisory board, will be made.
Phillips 66 isn't alone in making such moves. Other oil giants have divested their fuel station networks in Germany in recent years. Esso fuel stations were snatched up by the British retailer EG Group in 2017, while OMV fuel stations changed hands in 2022. The most recent acquisition spree was in 2023, when the Canadian Alimentation grabbed Total fuel stations in Germany and the Netherlands for a staggering 3.3 billion dollars.
With numerous oil giants shedding their fuel station networks, one can't help but wonder whether Phillips 66 has made the right move or embarked on a risky venture. Only time will tell if this decision fuels the company's growth or fuel the fire of its downfall.
- Fuel Stations
- Financial Markets
- Oil & Gas Industry
- Germany
- Austria
In light of the oil conglomerate Phillips 66 selling a majority stake of its jet fuel stations in Germany and Austria, the financial markets remain cautious. The proceeds from this deal could potentially help Phillips 66 reduce its debt and boost dividends, but the decision to retain a minority stake could impact the conglomerate's future performance in the oil and gas industry, particularly in the competitive German and Austrian markets.
