As Marathon Petroleum spins off Speedway, the Dayton-Springfield area will become home not only to a new publicly traded corporate headquarters, but the base of the largest U.S.-operated chain of retail convenience stores.
Marathon announced Thursday it was spinning off its subsidiary, Speedway. A Marathon spokesman said Thursday there are no plans to move the Speedway headquarters from Enon.
Speedway is one of the largest employers in the region and has approximately 2,500 employees locally. The convenience store chain has 40,000 employees nationally, said Marathon spokesman Jamal Kheiry.
Clark County Commission President Melanie Flax Wilt said the more business success Speedway enjoys, the greater the company’s impact on the local economy.
“Speedway is the only national corporate headquarters in Clark County,” Wilt said. “If they are successful, it means they are bringing more dollars into our local economy. That is a great thing because it supports our retail jobs and other businesses.”
Speedway has seen its number of stores triple to about 4,000 since 2011.
“We believe this separation will create two strong industry-leading companies, well positioned for long-term growth and success,” Gary Heminger, Marathon chairman and chief executive, said Thursday.
The Speedway chain has reached $1.5 billion in a key financial measure, EBITDA (earnings before interest, taxes, depreciation and amortization) — strong enough to handle publicly traded independence, leaders of Marathon believe.
There are no plans to move the Speedway headquarters from Enon, Kheiry said.
“There’s no plan for that at this time,” he said. “That’s not one of the things that we’ve announced.”
He also said it was too soon to say whether local administrative employment tied to the newly independent headquarters would rise or how exactly employment would be affected.
“It’s early days for the activity,” Kheiry said. “And so it’s going to be worked on and executed over the course of the next year or so. It’s very early in the process.”
Clark County commissioners approved a 100-percent, 15-year tax abatement last year to encourage Speedway to retain its corporate headquarters in Enon.
Speedway pushed ahead with construction to its corporate headquarters in Enon at the end of 2018. The project is a $48 million expansion that will add a new 140,000 square-foot building to its campus off of Enon Road. It is expected to be completed by the summer of 2020 and Speedway has pledged to add as many as 300 jobs in the area over a four-year period, Holfinger has previously said.
The spin-off does not require shareholder approval.
The company also announced a series of key leadership moves. Heminger, who has been chairman and CEO since 2016, is retiring, the company said.
Gregory Goff, executive vice chairman of Marathon, will retire effective Dec. 31. Michael Hennigan, current president of MPLX GP LLC, has been appointed chief executive of the same business, effective today, the company also said.
The news comes at a time of growth for Speedway. Most of that growth stems from two key acquisitions, starting with $2.8 billion deal to take over the Hess retail chain on the East Coast in 2015. Last year, the company spent $23.3 billion to acquire all outstanding shares of Andeavor, a refining company based in Texas. The move gave the company and its convenience store arm roughly 1,100 convenience stores.
The Speedway spin-off is not a new idea. It was one company leaders weighed and rejected in 2017. And the Wall Street Journal and others have reported recently that “activist shareholders” at Marathon, including Elliott Management Corp., have been urging a spinoff of the gas station chain.
Marathon said it had net income of $1.66 per share for the third quarter of 2019. Earnings, adjusted for non-recurring gains, reached $1.63 per share. Both measures beat Wall Street’s expectations.
The company also reported third-quarter profit of $1.1 billion, an increase from $737 million reported in the same period a year earlier.
Marathon Petroleum operates what it says is the nation’s largest refining system with more than three million barrels per day of crude oil capacity across 16 refineries.
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