All In On Gasoline: Chapter 4 7-Eleven Closes The Speedway Deal ERIC H. KARP, ESQ., GENERAL COUNSEL TO NCASEF
“We have reason to believe that this transaction is illegal…” “…which transaction…we have reason to believe violate(s) the antitrust laws.” ree momentous things happened on May 14, 2021. First, SEI closed its $21 billion purchase of approximately 3,800 Speedway stores in 36 states without first having clearance from the United States Federal Trade Commission (FTC). Second, the FTC, evenly divided with two members appointed by a Democratic president and two by a Republican president, saw dueling statements issued by the two camps, each blaming the other for the failure to address the anti-competitive aspects of the transaction. But this disagreement has caused many observers to overlook a commonality of the positions of the Republican and Democratic appointed commissioners. e first quote above is from the public statement issued by Commissioners Rebecca Kelly Slaughter and Rohit Chopra (the Democratically appointed commissioners) and the second quote is from the public statement issued by Commissioners Christine S. Wilson and Noah Joshua Phillips (the Republican appointed commissioners). ird, SEI issued its own public statement, stating that it had negotiated an agreement with FTC staff to divest itself of 293 stores, to address anti-competitive concerns. But this negotiated agreement never received majority approval from the FTC. Commissioners Slaughter and Chopra were particularly critical, stating that the transaction “… could impact competition and cause prices to soar at gas stations and convenience stores across the U.S.” Commissioners Wilson and Phillips stated that as a result of the failure to reach an agreement concerning a remedy “… consumers and businesses both lost.”
An article published on Law360.com summarizes the situation by stating that both sides were equally critical of the merger, calling it anticompetitive because of hundreds of potential gas station and convenience store overlaps. Additionally, an article published by the National Law Review characterizes SEI's decision to close the transaction without FTC approval as unusual given that merger parties “… normally wait for resolution with the antitrust authorities before completing their transaction.” e author cites SEI’s $3.3 billion acquisition of retail fuel stations from Sunoco in 2018, which was closed only aer a consent agreement had been reached with the FTC. Commissioners Slaughter and Chopra labeled the decision to close without a resolution from the FTC highly unusual and extremely troubling. ey warned that the parties have closed their transition “at their own risk” and that the FTC will continue to investigate to determine an appropriate path forward. SEI’s strategy has been the subject of some speculation. Some might call it bold, others might call it calculating, and still others might call it arrogant. SEI is banking on the notion that it is more difficult to undo a merger than to block one, and with a Democratic president and both houses of Congress controlled by the Democratic Party, it is only a matter of time before the FTC has a three to two Dem-
“SEI closed its $21 billion purchase of approximately 3,800 Speedway stores in 36 states without first having clearance from the Federal Trade Commission.” ocratic majority. Indeed, the President's nominee has a significant background in antitrust matters and has argued for a more robust enforcement policy. But since Commissioner Chopra has been nominated to head a different agency, it may take two appointments by this Democratic administration to secure a three to two majority. is delay helps SEI, by reducing the risk of enforcement actions by the FTC. While this review of what some might call ‘inside baseball’ is useful and instructive, the logical question is why should the National continued on page 34
“Commissioners Slaughter and Chopra labeled the decision to close without a resolution from the FTC highly unusual and extremely troubling. They warned that the parties have closed their transition ‘at their own risk’ and that the FTC will continue to investigate to determine an appropriate path forward.” AVANTI M AY | J U N E 2 0 2 1
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