Hess has agreed to sell its retail business to Marathon Petroleum for a total cash consideration of $2.6 billion. Hess Retail is the largest chain of company operated gas stations and convenience stores along the East Coast with 1,342 locations.
Proceeds from the sale will be used for additional share repurchases, and the company has increased its existing share repurchase authorization from $4 billion to $6.5 billion. Since the commencement of the program in August 2013, the company has repurchased about $2.8 billion in stock.
CEO John Hess said, “The sale of our retail business marks the culmination of our strategic transformation into a pure-play exploration and production (E&P) company.”
The transaction is subject to customary closing conditions and is expected to be completed before year-end 2014.
In March 2013, Hess announced it was transforming into a pure play E&P company by divesting its downstream businesses, including retail, energy marketing and energy trading.
In 2013, Hess sold its Energy Marketing business to Direct Energy. The energy marketing business supplies natural gas and electricity to commercial, industrial and small business customers in the eastern half of the United States.