Seven & i Holdings Co., Ltd.; Analysis of Agreement Containing Consent Orders To Aid Public Comment, 38343-38348 [2021-15350]
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Federal Register / Vol. 86, No. 136 / Tuesday, July 20, 2021 / Notices
distribute existing stocks of these
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disposal.
B. For Product 1021–2600
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For product 1021–2600, the registrant
has requested that the cancellation
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Because the Agency has identified no
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associated with this pesticide product,
upon cancellation of this product
cancellation, identified in Table 1A of
Unit II, EPA anticipates allowing
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registrants will be prohibited from
selling or distributing this product
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Authority: 7 U.S.C. 136 et seq.
Dated: July 9, 2021.
Marietta Echeverria,
Director, Registration Division, Office of
Pesticide Programs.
[FR Doc. 2021–15394 Filed 7–19–21; 8:45 am]
BILLING CODE 6560–50–P
FEDERAL RESERVE SYSTEM
FEDERAL TRADE COMMISSION
Change in Bank Control Notices;
Acquisitions of Shares of a Bank or
Bank Holding Company
[File No. 201 0108]
The notificants listed below have
applied under the Change in Bank
Control Act (Act) (12 U.S.C. 1817(j)) and
§ 225.41 of the Board’s Regulation Y
(12 CFR 225.41) to acquire shares of a
bank or bank holding company. The
factors that are considered in acting on
the applications are set forth in
paragraph 7 of the Act (12 U.S.C.
1817(j)(7)).
The public portions of the
applications listed below, as well as
other related filings required by the
Board, if any, are available for
immediate inspection at the Federal
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the offices of the Board of Governors.
This information may also be obtained
on an expedited basis, upon request, by
contacting the appropriate Federal
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request.htm. Interested persons may
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Comments regarding each of these
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than August 4, 2021.
A. Federal Reserve Bank of Chicago
(Colette A. Fried, Assistant Vice
President) 230 South LaSalle Street,
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1. The Richard R. Drake Family
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Shirar, Marshalltown, Iowa; Edwin A.
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individually and as co-trustees; to join
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group acting in concert, to retain voting
shares of Drake Holding Company, and
indirectly retain voting shares of
Security State Bank, both of Radcliffe,
Iowa.
Board of Governors of the Federal Reserve
System, July 15, 2021.
Michele Taylor Fennell,
Deputy Associate Secretary of the Board.
[FR Doc. 2021–15384 Filed 7–19–21; 8:45 am]
BILLING CODE P
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Seven & i Holdings Co., Ltd.; Analysis
of Agreement Containing Consent
Orders To Aid Public Comment
Federal Trade Commission.
Proposed consent agreement;
request for comment.
AGENCY:
ACTION:
The consent agreement in this
matter settles alleged violations of
federal law prohibiting unfair methods
of competition. The attached Analysis of
Proposed Consent Orders to Aid Public
Comment describes both the allegations
in the complaint and the terms of the
consent orders—embodied in the
consent agreement—that would settle
these allegations.
DATES: Comments must be received on
or before August 19, 2021.
ADDRESSES: Interested parties may file
comments online or on paper, by
following the instructions in the
Request for Comment part of the
SUPPLEMENTARY INFORMATION section
below. Please write: ‘‘Seven & i
Holdings Co., Ltd.; File No. 201 0108’’
on your comment, and file your
comment online at www.regulations.gov
by following the instructions on the
web-based form. If you prefer to file
your comment on paper, please mail
your comment to the following address:
Federal Trade Commission, Office of the
Secretary, 600 Pennsylvania Avenue
NW, Suite CC–5610 (Annex D),
Washington, DC 20580; or deliver your
comment to the following address:
Federal Trade Commission, Office of the
Secretary, Constitution Center, 400 7th
Street SW, 5th Floor, Suite 5610 (Annex
D), Washington, DC 20024.
FOR FURTHER INFORMATION CONTACT:
Nicholas Bush (202–326–2848), Bureau
of Competition, Federal Trade
Commission, 600 Pennsylvania Avenue
NW, Washington, DC 20580.
SUPPLEMENTARY INFORMATION: Pursuant
to Section 6(f) of the Federal Trade
Commission Act, 15 U.S.C. 46(f), and
FTC Rule 2.34, 16 CFR 2.34, notice is
hereby given that the above-captioned
consent agreement containing a consent
order to cease and desist, having been
filed with and accepted, subject to final
approval, by the Commission, has been
placed on the public record for a period
of thirty (30) days. The following
Analysis of Agreement Containing
Consent Orders to Aid Public Comment
describes the terms of the consent
agreement and the allegations in the
complaint. An electronic copy of the
full text of the consent agreement
package can be obtained from the FTC
SUMMARY:
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Federal Register / Vol. 86, No. 136 / Tuesday, July 20, 2021 / Notices
website at this web address: https://
www.ftc.gov/news-events/commissionactions.
You can file a comment online or on
paper. For the Commission to consider
your comment, we must receive it on or
before August 19, 2021. Write ‘‘Seven &
i Holdings, Ltd.; File No. 201 0108’’ on
your comment. Your comment—
including your name and your state—
will be placed on the public record of
this proceeding, including, to the extent
practicable, on the www.regulations.gov
website.
Due to protective actions in response
to the COVID–19 pandemic and the
agency’s heightened security screening,
postal mail addressed to the
Commission will be subject to delay. We
strongly encourage you to submit your
comments online through the
www.regulations.gov website.
If you prefer to file your comment on
paper, write ‘‘Seven & i Holdings, Ltd.;
File No. 201 0108’’ on your comment
and on the envelope, and mail your
comment to the following address:
Federal Trade Commission, Office of the
Secretary, 600 Pennsylvania Avenue
NW, Suite CC–5610 (Annex D),
Washington, DC 20580; or deliver your
comment to the following address:
Federal Trade Commission, Office of the
Secretary, Constitution Center, 400 7th
Street SW, 5th Floor, Suite 5610 (Annex
D), Washington, DC 20024. If possible,
submit your paper comment to the
Commission by courier or overnight
service.
Because your comment will be placed
on the publicly accessible website at
www.regulations.gov, you are solely
responsible for making sure that your
comment does not include any sensitive
or confidential information. In
particular, your comment should not
include any sensitive personal
information, such as your or anyone
else’s Social Security number; date of
birth; driver’s license number or other
state identification number, or foreign
country equivalent; passport number;
financial account number; or credit or
debit card number. You are also solely
responsible for making sure your
comment does not include any sensitive
health information, such as medical
records or other individually
identifiable health information. In
addition, your comment should not
include any ‘‘trade secret or any
commercial or financial information
which . . . is privileged or
confidential’’—as provided by Section
6(f) of the FTC Act, 15 U.S.C. 46(f), and
FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2)—
including in particular competitively
sensitive information such as costs,
sales statistics, inventories, formulas,
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patterns, devices, manufacturing
processes, or customer names.
Comments containing material for
which confidential treatment is
requested must be filed in paper form,
must be clearly labeled ‘‘Confidential,’’
and must comply with FTC Rule 4.9(c).
In particular, the written request for
confidential treatment that accompanies
the comment must include the factual
and legal basis for the request, and must
identify the specific portions of the
comment to be withheld from the public
record. See FTC Rule 4.9(c). Your
comment will be kept confidential only
if the General Counsel grants your
request in accordance with the law and
the public interest. Once your comment
has been posted on
www.regulations.gov—as legally
required by FTC Rule 4.9(b)—we cannot
redact or remove your comment from
that website, unless you submit a
confidentiality request that meets the
requirements for such treatment under
FTC Rule 4.9(c), and the General
Counsel grants that request.
Visit the FTC website at https://
www.ftc.gov to read this Notice and the
news release describing this matter. The
FTC Act and other laws that the
Commission administers permit the
collection of public comments to
consider and use in this proceeding, as
appropriate. The Commission will
consider all timely and responsive
public comments that it receives on or
before August 19, 2021. For information
on the Commission’s privacy policy,
including routine uses permitted by the
Privacy Act, see https://www.ftc.gov/
site-information/privacy-policy.
Analysis of Agreement Containing
Consent Orders To Aid Public Comment
I. Introduction
The Federal Trade Commission
(‘‘Commission’’) has accepted for public
comment, subject to final approval, an
Agreement Containing Consent Orders
(‘‘Consent Agreement’’) from Seven & i
Holdings Co., Ltd., a Japanese company,
7-Eleven, Inc., the U.S. subsidiary,
(collectively, ‘‘7-Eleven’’) and Marathon
Petroleum Corporation (‘‘Marathon’’)
(collectively, the ‘‘Respondents’’). The
Consent Agreement is designed to
remedy the anticompetitive effects that
likely are resulting from 7-Eleven’s
consummated acquisition of Marathon’s
wholly-owned subsidiary Speedway
LLC (‘‘Speedway’’). The Commission
also issued the Order to Maintain Assets
included in the Consent Agreement.
Pursuant to Commission Rules of
Practice, a consent agreement was
proposed prior to Respondents’
consummation of the transaction, but
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the Commission had not accepted the
proposal because a majority did not find
certain provisions in the proposal
sufficient to fully resolve competitive
concerns stemming from the
transaction. 7-Eleven closed on the
acquisition on May 14, 2021 with full
knowledge the acquisition was in
violation of Section 7 of the Clayton Act
and Section 5 of the FTC Act.
Respondents subsequently agreed to a
revised proposed Decision and Order
(‘‘Order’’), described herein, that
restores competition lost from the
transaction. Under the terms of the
Order included in the Consent
Agreement, 7-Eleven must divest to
Commission-approved Buyers certain
Speedway retail fuel outlets and related
assets in 291 local markets, and certain
7-Eleven retail fuel outlets and related
assets in 2 local markets, across 20
states. The Order requires the
divestitures to take place no later than
180 days after May 14, 2021, the day 7Eleven closed on its acquisition of
Marathon’s assets. The Commission
prefers divestitures to upfront buyers
that occur close in time with the closing
of the main transaction, but Commission
orders will allow for a longer divestiture
period when specific, demonstrable
circumstances warrant. In this matter,
the Commission recognizes that the
particular logistical and regulatory
requirements of transferring 293 stations
across 20 states necessitates a longer
process of rolling divestitures to three
Buyers. To ensure that as many
divestitures happen as quickly as
possible, the Order requires that 7Eleven divests the outlets to the Buyers
based on the Buyer-approved divestiture
schedules incorporated into the Order,
and that 7-Eleven meets specific
divestiture benchmarks at 90, 120, and
150 days.
The Order to Maintain Assets requires
Respondents to operate and maintain
each divestiture outlet in the normal
course of business through the date the
Commission-approved Buyer acquires
the outlet. In addition, the Order and
Order to Maintain Assets require that
until 7-Eleven divests the outlets, it
must maintain separate retail fuel
pricing teams and keep information
related to pricing decisions for the
divestiture outlets separate from the
retail fuel pricing for 7-Eleven’s other
outlets.
The Order also prohibits 7-Eleven
from enforcing noncompete provisions
in its franchise agreements against
current franchisees or others who might
seek employment at the divestiture
outlets. This provision reduces the
likelihood any 7-Eleven noncompete
provisions will have a chilling effect on
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franchisees or others in seeking
employment or doing business with the
divestiture outlets. Given that 7-Eleven
consummated an illegal transaction,
expressly safeguarding the Buyers’
access to essential employees or
business partners is particularly
necessary to protect the effectiveness of
the divestitures.
The Commission has placed the
Consent Agreement on the public record
for 30 days to solicit comments from
interested persons. Comments received
during this period will become part of
the public record. After 30 days, the
Commission will review the comments
received and decide whether it should
withdraw, modify, or make the Order
final.
II. The Respondents
Seven & i Holdings Co., Ltd., a
publicly-traded company headquartered
in Tokyo, Japan, owns and operates
convenience stores and retail fuel
outlets worldwide under the 7-Eleven
brand. 7-Eleven, Inc. owns, operates,
and franchises approximately 9,000
stores in the United States, making it the
largest convenience store chain in the
country. Roughly 46 percent of 7Eleven’s stores offer fuel. 7-Eleven’s
revenue in 2020 totaled over $20 billion,
with fuel sales accounting for over $13
billion.
Marathon, a publicly-traded company
headquartered in Findlay, Ohio,
operates a vertically-integrated refining,
marketing, retail, and transportation
system for petroleum and petroleum
products. Marathon is the largest U.S.
refiner, with approximately 2.9 million
barrels per day of crude oil refining
capacity. In 2020, Marathon’s revenues
totaled over $69 billion. Marathon’s
former wholly-owned subsidiary,
Speedway, controls and sets retail fuel
pricing at 3,898 retail transportation fuel
and convenience stores across the
United States, making it the third-largest
domestic chain of company-owned and
-operated retail fuel outlets and
convenience stores. Speedway’s 2020
retail business revenues totaled over $19
billion, with sales of nearly 6 billion
gallons of gasoline and diesel in 2019.
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III. The Transaction
Pursuant to an Asset Purchase
Agreement dated August 2, 2020, 7Eleven acquired substantially all of
Marathon’s Speedway retail assets for
approximately $21 billion, subject to
adjustments (the ‘‘Transaction’’). 7Eleven and Marathon also entered into
a 15-year agreement under which
Marathon will supply and transport fuel
to the Speedway business, with a base
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volume of 7.7 billion gallons per year of
gasoline and diesel.
The Commission’s Complaint alleges
the Transaction violates Section 7 of the
Clayton Act, as amended, 15 U.S.C. 18,
and Section 5 of the Federal Trade
Commission Act, as amended, 15 U.S.C.
45, by substantially lessening
competition for the retail sale of
gasoline and/or the retail sale of diesel
in 293 local markets across 20 states.
IV. The Retail Sale of Gasoline and
Diesel
The Commission’s Complaint alleges
that relevant product markets in which
to analyze the Transaction are the retail
sale of gasoline and the retail sale of
diesel. Consumers require gasoline for
their gasoline-powered vehicles and can
purchase gasoline only at retail fuel
outlets. Likewise, consumers require
diesel for their diesel-powered vehicles
and can purchase diesel only at retail
fuel outlets. The retail sale of gasoline
and the retail sale of diesel constitute
separate relevant markets because the
two are not interchangeable. Vehicles
that run on gasoline cannot run on
diesel and vehicles that run on diesel
cannot run on gasoline.
The Commission’s Complaint alleges
293 local relevant geographic markets in
which to assess the competitive effects
of the Transaction within the following
states: Arizona; California; Florida;
Illinois; Indiana; Kentucky;
Massachusetts; Michigan; North
Carolina; New Hampshire; Nevada; New
York; Ohio; Pennsylvania; Rhode Island;
South Carolina; Tennessee; Utah;
Virginia; and West Virginia.
The geographic markets for retail
gasoline and retail diesel are highly
localized, depending on the unique
circumstances of each area. Each
relevant market is distinct and factdependent, reflecting many
considerations, including commuting
patterns, traffic flows, and outlet
characteristics. Consumers typically
choose between nearby retail fuel
outlets with similar characteristics along
their planned routes. The geographic
markets for the retail sale of diesel are
similar to the corresponding geographic
markets for retail gasoline, as many
diesel consumers exhibit preferences
and behaviors similar to those of
gasoline consumers.
The Transaction substantially lessens
competition in each of these local
markets, resulting in 264 highly
concentrated markets for the retail sale
of gasoline and 153 highly concentrated
markets for the retail sale of diesel fuel,
with many of the 293 markets
presenting concerns for both products.
Retail fuel outlets compete on price,
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38345
store format, product offerings, and
location, and pay close attention to
competitors in close proximity, on
similar traffic flows, and with similar
store characteristics. In each of the local
gasoline and diesel retail markets, the
Transaction reduces the number of
competitively constraining independent
market participants to three or fewer. 7Eleven will be able to raise prices
unilaterally in markets where 7-Eleven
and Speedway are close competitors.
Absent the Transaction, 7-Eleven and
Speedway would have continued to
compete head to head in these local
markets.
Moreover, the Transaction enhances
the incentives for interdependent
behavior in local markets where,
including 7-Eleven, only two or three
competitively constraining independent
market participants remain. Two aspects
of the retail fuel industry make it
vulnerable to such coordination. First,
retail fuel outlets post their fuel prices
on price signs that are visible from the
street, allowing competitors easily to
observe each other’s fuel prices. Second,
retail fuel outlets regularly track their
competitors’ fuel prices and change
their own prices in response. These
repeated interactions give retail fuel
outlets familiarity with how their
competitors price and how changing
prices affect fuel sales.
Entry into each relevant market will
not be timely, likely, or sufficient to
deter or counteract the anticompetitive
effects arising from the Transaction.
Significant entry barriers include the
availability of attractive real estate, the
time and cost associated with
constructing a new retail fuel outlet, and
the time associated with obtaining
necessary permits and approvals.
V. The Order
The Order remedies the Transaction’s
likely anticompetitive effects by
requiring 7-Eleven to divest Speedway
retail fuel outlets in 291 local markets,
and 7-Eleven retail fuel outlets in 2 local
markets, in three separate packages, to
CrossAmerica Partners LP (‘‘CAPL’’),
Jacksons Food Stores, Inc. (‘‘Jacksons’’),
and Anabi Oil Corporation (‘‘Anabi’’)
(collectively, the ‘‘Buyers’’).
CAPL is a publicly-traded master
limited partnership and a wholesale
supplier of motor fuels, a convenience
store operator, and an owner and lessor
of real estate used in the retail
distribution of motor fuels. CAPL
distributes branded and unbranded fuel
to approximately 1,800 locations and
owns or leases approximately 1,100
sites, including 150 company-operated
sites.
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In 2020, the Commission fined
Alimentation Couche-Tard Inc. (‘‘ACT’’)
and its then-affiliate CAPL $3.5 million
to settle allegations that the companies
violated a 2018 Commission order
requiring divestitures of 10 retail fuel
outlets related to ACT’s acquisition of
Holiday Companies. ACT controlled
CAPL’s general partner when the
alleged order violation occurred and
agreed to divest a package of retail fuel
outlets that were part of CAPL’s retail
network to resolve the Commission’s
concerns. The alleged order violation
resulted from, among other things,
ACT’s failure to divest the CAPL outlets
by the Commission-imposed deadline.
The alleged violation does not
disqualify CAPL from consideration as
an acceptable buyer in this instance.
CAPL has not been affiliated with ACT
in any way since November 2019, when
Mr. Joseph V. Topper, Jr. and his
organization, the Topper Group,
acquired the controlling interest in
CAPL’s general partner from ACT, and
thereby severed completely CAPL’s
affiliation with ACT. CAPL has since
revamped its management. Mr. Topper
now serves as CAPL’s chairman of the
board, and he and his organization have
the ability to appoint all members of
CAPL’s board as well as control CAPL’s
operations and activities. Moreover,
prior to Mr. Topper acquiring control of
CAPL, ACT agreed to indemnify CAPL
for penalties and legal costs associated
with the alleged order violation.
The two other Buyers are Jacksons
and Anabi. Jacksons is a privately-held
corporation that controls a chain of over
230 Chevron-, Shell-, and Texacobranded retail fuel locations in six
western states. Jacksons also is a joint
venture partner in Jackson Energy, a
wholesale fuel supply company that
distributes gasoline and diesel fuel to
retail fuel outlets in the western United
States. Anabi, a privately-owned and
operated retail fuel supplier, is one of
the largest Shell-branded distributors in
California and controls retail fuel
locations in California, Nevada, and
Alaska. The Commission is satisfied that
the Buyers present no competitive
problems in markets where they will
acquire divested assets and are
otherwise qualified to acquire and
operate the assets in their respective
divestiture packages.
The Order requires 7-Eleven to divest:
(a) 105 Speedway retail fuel outlets and
a single 7-Eleven retail fuel outlet to
CAPL; (b) 63 Speedway retail fuel
outlets to Jacksons; and (c) 123
Speedway retail fuel outlets and a single
7-Eleven retail fuel outlet to Anabi. To
ensure that 7-Eleven is incentivized to
complete all of the divestitures in an
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expedient manner, the Order requires 7Eleven to: (1) Divest on Buyer-approved
divestiture schedules, and (2) divest no
fewer than a certain number of outlets
at certain points within the 180 day
divestiture period.
Specifically, Paragraph II.A of the
Order requires Respondents to divest
pursuant to the Buyer-approved
divestiture schedules. Under Paragraph
XI.A.1 of the Order, 7-Eleven is required
to submit to the Commission the Buyerapproved divestiture schedules—
identifying the divestiture date for each
location—within 60 days after May 14.
The Buyers will control the divestiture
schedules, and those schedules are
enforceable by the Commission against
7-Eleven. The Order also requires 7Eleven to meet certain divestiture
benchmarks—with no fewer than 20
percent of each package divested within
90 days, an additional 20 percent of
each package divested within 120 days,
and an additional 20 percent of each
package divested within 150 days of the
main Transaction closing. 7-Eleven will
have to complete all of the divestitures
within 180 days. Taken together, this
divestiture process will incentivize 7Eleven to complete the divestitures in a
timely and expeditious manner, and
give the Commission close oversight
into the divestiture schedules.
The Order contains additional
provisions designed to ensure the
effectiveness of the relief, and to prevent
7-Eleven from having access to critical
competitive information regarding the
divestiture outlets. The Order requires
7-Eleven and Marathon to maintain the
economic viability, marketability, and
competitiveness of each divestiture
asset until the divestitures are complete.
Also, the Order requires Respondents to
designate an Asset Maintenance
Manager to oversee operations of the
divestiture assets to ensure the
Respondents maintain the divestiture
assets’ full economic viability,
marketability, and competitiveness until
the divestitures are completed and to
help facilitate the transfer of the
divestiture assets to the Buyers.
Additionally, the Order requires the
Respondents to establish a divestiture
pricing team that will handle retail fuel
pricing at the divestiture outlets, and to
prevent access and disclosure of that
pricing information to anyone other
than the divestiture pricing team. The
Asset Maintenance Manager will
oversee the divestiture pricing team to
ensure that confidential pricing
information is not shared with other
employees at 7-Eleven who may price
retail fuel at competing stations. The
Order requires the Respondents to
institute information technology
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procedures, authorizations, protocols,
and any other controls necessary to
prevent unauthorized disclosure or
access of information to or from the
divestiture pricing team. Finally, the
Order appoints The Claro Group as an
independent third-party Monitor to
oversee the Respondents’ compliance
with the requirements of the Order and
to oversee the Asset Maintenance
Manager.
The Order also contains provisions
regarding Respondents’ employees and
franchisees, designed to protect the
viability of the divestiture assets.
Section V contains provisions to ensure
that the Buyers face no impediments in
hiring employees necessary to operate
the divestiture assets as competitively as
Speedway operated them before the
Transaction. Paragraph V.E prohibits 7Eleven from enforcing noncompete
provisions against current franchisees or
others who might seek employment at
the divestiture outlets. This provision
reduces the likelihood that the
noncompete provisions will have a
chilling effect on franchisees or others
in seeking employment or doing
business with the divestiture outlets.
Given that 7-Eleven has consummated
an illegal transaction, expressly
safeguarding the Buyers’ access to
essential employees or business partners
is particularly necessary to protect the
effectiveness of the divestitures.
In addition to requiring retail fuel
outlet divestitures, the Order also
requires 7-Eleven, for a period of five
years, to obtain prior Commission
approval before purchasing any of the
divested outlets, and for a period of ten
years, to provide the Commission prior
notice of future acquisitions of the
divested outlets and of Commissionidentified retail fuel outlets located in
the 293 local markets at issue and three
additional markets. These three
additional markets raised concerns that
are addressed by Speedway’s near-term
exit from the markets for reasons
outside its control. The prior notice
provision is necessary because an
acquisition in close proximity to
divested assets likely would raise the
same competitive concerns as the
Transaction and may fall below the
Hart-Scott-Rodino Act premerger
notification thresholds.
The purpose of this analysis is to
facilitate public comment on the Order,
and the Commission does not intend
this analysis to constitute an official
interpretation of the Order or to modify
its terms in any way. The Offices of the
California and Florida Attorneys
General participated in both the
investigation and the consent process.
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By direction of the Commission, Chair Lina
Khan not participating.
April J. Tabor,
Secretary.
khammond on DSKJM1Z7X2PROD with NOTICES
Joint Concurring Statement of
Commissioners Rebecca Kelly
Slaughter and Rohit Chopra
Today, the Commission accepted for
public comment an order that would
resolve competitive concerns raised by
the illegal acquisition of a Marathon
Petroleum subsidiary by Seven & i
Holdings (collectively ‘‘7-Eleven’’). The
approximately $21 billion deal involved
nearly 4,000 retail fuel and convenience
store locations. On May 14, 2021, the
parties consummated the deal, despite
knowing that the Commission had
outstanding—but resolvable—concerns
about the transaction and about the
parties’ proposal to resolve those
concerns at the time. The agreement to
merge and the decision to consummate
substantially lessened competition in
293 local geographic markets across
twenty states, in violation of Section 5
of the FTC Act and Section 7 of the
Clayton Act. While Commission staff
had worked diligently to resolve the
competitive concerns raised by the
transaction, negotiating hundreds of
divestitures to three different buyers,
the parties had not reached a settlement
that the Commission could accept when
they closed.
The job of the Commission is to
pursue the correct outcome in cases, not
the expedient one. Here, it was
important to take the few extra weeks
necessary to ensure that the resolution
would effectively preserve competition
and that any risk would be borne by the
parties, not by consumers, workers, and
other market participants. Today’s
settlement achieves that in a few key
ways.
First, the order holds 7-Eleven
accountable for executing divestitures
quickly and efficiently. The
Commission’s general preference is for
divestitures to happen as close in time
to the transaction as is practicable in
order to protect competition.1 Here,
1 See, e.g., Press Release, Fed. Trade Comm’n,
FTC Requires Divestitures as Condition of 7-Eleven,
Inc. Parent Company’s $3.3 Billion Acquisition of
Nearly 1,100 Retail Fuel Outlets from Competitor
Sunoco (Jan. 18, 2020), https://www.ftc.gov/newsevents/press-releases/2018/01/ftc-requiresdivestitures-condition-7-eleven-inc-parentcompanys (requiring the parties divest 26 stations
over the course of 90 days); Press Release, Fed.
Trade Comm’n, FTC Approves Final Order
Imposing Conditions on Arko Holdings Ltd.’s
Acquisition of Empire Petroleum Partners, LLC
(Oct. 7, 2020), https://www.ftc.gov/news-events/
press-releases/2020/10/ftc-approves-final-orderimposing-conditions-arko-holdings-ltds (ordering
divestiture of 7 stations over the course of 20 days);
Press Release, Fed. Trade Comm’n, FTC Approves
VerDate Sep<11>2014
17:00 Jul 19, 2021
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given the scope and complexity of the
required divestitures, a longer end date
is justified, provided the divestitures
happen on an ongoing basis. Today’s
proposal includes provisions with
rolling divestiture timelines,
benchmarked at 90, 120, and 150 days,
and completed within 180 days from
May 14, 2021—the date of the illegal
merger. If 7-Eleven fails to follow these
benchmarks and the buyers’ schedules,
7-Eleven will be in violation of today’s
proposed order.
Second, 7-Eleven will be prohibited
from enforcing noncompete provisions
against current franchisees or others
who might seek employment at the
divestiture outlets. Noncompete
provisions generally prevent workers
and small business franchises from
fairly bargaining for employment and
opportunity. In this instance, they could
also prevent divestiture buyers from
accessing the talent that could best
facilitate their ability to restore
competition in the relevant markets.
The prohibition in the order is
consistent with prior Commission
action,2 but is especially important in
this case, given that 7-Eleven
consummated an illegal transaction.
Expressly safeguarding the buyers’
access to essential employees or
business partners is particularly
necessary to protect the effectiveness of
the divestitures.
The terms of this order are wellgrounded in Commission precedent and
reflect learned experience from past
orders. The Commission’s past
experiences show that divestitures that
are not carefully constructed end up
failing to adequately protect consumers,
workers, and competition.3 It is
disturbing that 7-Eleven failed to resolve
these matters before consummating their
illegal transaction. Typically, merging
parties will wait for the Commission to
accept an order for public comment
before closing on their transaction. Here,
the transaction involved billions of
dollars in thousands of unique
geographic markets across the United
States; when parties propose
transactions this large and complex,
with obvious violations of the law, they
must accept that proper review may take
time. Notwithstanding that scope, in
this case, Commission staff conducted
an extensive investigation, identified
overlaps, vetted divestiture buyers, and
negotiated terms of divestitures with the
parties—all in a matter of months.
Working through the remaining
concerns at the Commission level would
not have been and was not timeconsuming.
7-Eleven chose to close under a cloud
of legal uncertainty rather than to
resolve its issues with the Commission;
it learned that this Commission will not
be dared into accepting settlements we
do not find adequate. We hope other
parties will learn that working
constructively with the Commission—
rather than consummating an illegal
merger—is a more effective and
responsible path.
Final Order Imposing Conditions on Tri Star
Energy, LLC’s Acquisition of Certain Assets of
Hollingsworth Oil Company, Inc., C & H Properties,
and Ronald L. Hollingsworth (Aug. 14, 2020),
https://www.ftc.gov/news-events/press-releases/
2020/08/ftc-approves-final-order-imposingconditions-tri-star-energy (ordering divestiture of 2
stations over the course of 10 days); but see Press
Release, Fed. Trade Comm’n, FTC Requires Retail
Fuel Station and Convenience Store Operator
Alimentation Couche-Tard Inc. and its affiliate
CrossAmerica Partners LP to Divest 10 Fuel Stations
in Minnesota and Wisconsin as a Condition of
Acquiring Holiday Companies (Dec. 15, 2017),
https://www.ftc.gov/news-events/press-releases/
2017/12/ftc-requires-retail-fuel-stationconvenience-store-operator (allowing 120 days to
find a buyer for and divest 10 stations; the
Commission later alleged the parties violated the
divestiture order, and the parties agreed to pay a
$3.5 million civil penalty to the FTC to settle those
allegations).
2 See Statement of Commissioners Rohit Chopra
and Rebecca Kelly Slaughter in the Matter of DTE
Energy/Generation Pipeline, Fed. Trade Comm’n
(Sept. 12, 2019), https://www.ftc.gov/system/files/
documents/public_statements/1544138/joint_
statement_of_chopra_and_slaughter_dte_energygeneration_pipeline_9-13-19.pdf; Press Release,
Fed. Trade Comm’n, FTC Approves Final Order
Imposing Conditions on Merger of Air Medical
Group Holdings, Inc. and AMR Holdco, Inc. (May
3, 2018), https://www.ftc.gov/news-events/pressreleases/2018/05/ftc-approves-final-order-imposingconditions-merger-air-medical (divestiture of air
ambulance services in Hawaii).
Statement of Commissioners Noah
Joshua Phillips and Christine S. Wilson
PO 00000
Frm 00084
Fmt 4703
Sfmt 4703
Today, the Federal Trade Commission
has accepted for public comment a
consent agreement resolving all
competition concerns presented by
Seven & i Holdings Co.’s acquisition of
nearly 4,000 gas stations from Marathon
Petroleum Corporation. A settlement in
this matter is long overdue. As we noted
in our statement of May 14, 2021,1 the
day on which the parties consummated
their transaction, the Commission had
3 See Press Release, Fed. Trade Comm’n, FTC
Releases Staff Study Examining Commission Merger
Remedies between 2006 and 2012 (Feb. 3, 2017),
https://www.ftc.gov/news-events/press-releases/
2017/02/ftc-releases-staff-study-examiningcommission-merger-remedies; Fed. Trade Comm’n,
A Study of the Commission’s Divestiture Process
(1999), https://www.ftc.gov/sites/default/files/
documents/reports/study-commissions-divestitureprocess/divestiture_0.pdf.
1 See Statement of Commissioners Noah Joshua
Phillips & Christine S. Wilson, Seven & i Holdings
Co., Ltd./Marathon Petroleum Corp., FTC File No.
201–0108 (May 14, 2021), https://www.ftc.gov/
system/files/documents/publicstatements/1590067/
2010108sevenmarathonphillipswilson
statement.pdf.
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Federal Register / Vol. 86, No. 136 / Tuesday, July 20, 2021 / Notices
ample opportunity to act before the
parties merged.2
To the extent the Analysis to Aid
Public Comment or other statements
issued suggest that Seven & i Holdings
or its U.S. subsidiary 7-Eleven Inc. acted
in bad faith, the public is free to read
our earlier statement and Seven & i
Holding’s side of the story,3 the veracity
of which no commissioner has disputed
in the month since they were issued.
Those accounts paint a different, and
regrettable, picture of what happened.
We thank our staff for their diligence,
professionalism, and responsiveness
throughout this process; the
Commission’s failures here are in no
way a reflection of their efforts.
[FR Doc. 2021–15350 Filed 7–19–21; 8:45 am]
BILLING CODE 6750–01–P
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
National Institutes of Health
National Institute of Neurological
Disorders and Stroke; Notice of Closed
Meeting
Pursuant to section 10(d) of the
Federal Advisory Committee Act, as
amended, notice is hereby given of the
following meeting.
The meeting will be closed to the
public in accordance with the
provisions set forth in sections
552b(c)(4) and 552b(c)(6), Title 5 U.S.C.,
as amended. The grant applications and
the discussions could disclose
confidential trade secrets or commercial
property such as patentable material,
and personal information concerning
individuals associated with the grant
applications, the disclosure of which
would constitute a clearly unwarranted
invasion of personal privacy.
khammond on DSKJM1Z7X2PROD with NOTICES
Name of Committee: National Institute of
Neurological Disorders and Stroke Special
2 Indeed, the settlement before the Commission
on May 14 required the divestiture of 293 fuel
outlets, see Press Release, 7-Eleven Inc., Response
to FTC Commissioner Statement (May 14, 2021),
https://corp.7-eleven.com/corppress-releases/05-142021-7-eleven-inc-response-to-ftc-commissionerstatement; and the settlement unanimously
accepted by the Commission today similarly
requires the divestiture of 293 fuel outlets.
Commissioners Slaughter and Chopra highlight the
order provision that prohibits Seven & i’s subsidiary
7-Eleven from enforcing noncompete provisions
against current franchisees or others who might
seek employment at the divestiture outlets. This
narrow provision is consistent with previous
Commission orders that impose conditions to
ensure that divested assets have access to the
employees necessary to ensure the success of the
divestiture.
3 Statement of Commissioners Noah Joshua
Phillips & Christine S. Wilson, supra note 1; Press
Release, 7-Eleven, Inc., supra note 2.
VerDate Sep<11>2014
17:00 Jul 19, 2021
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Emphasis Panel; Accelerating Medicine
Partnership in Parkinson’s Disease (AMP
PD).
Date: July 30, 2021.
Time: 10:00 a.m. to 6:00 p.m.
Agenda: To review and evaluate grant
applications.
Place: National Institutes of Health,
Neuroscience Center, 6001 Executive
Boulevard, Rockville, MD 20852 (Virtual
Meeting).
Contact Person: Mirela Milescu, Ph.D.,
Scientific Review Officer, Scientific Review
Branch, Division of Extramural Activities,
NINDS/NIH, NSC, 6001 Executive Blvd.,
Suite 3208, MSC 9529, Rockville, MD 20852,
mirela.milescu@nih.gov.
This notice is being published less than 15
days prior to the meeting due to the timing
limitations imposed by the review and
funding cycle.
(Catalogue of Federal Domestic Assistance
Program Nos. 93.853, Clinical Research
Related to Neurological Disorders; 93.854,
Biological Basis Research in the
Neurosciences, National Institutes of Health,
HHS)
Dated: July 15, 2021.
David W. Freeman,
Program Analyst, Office of Federal Advisory
Committee Policy.
[FR Doc. 2021–15367 Filed 7–19–21; 8:45 am]
BILLING CODE 4140–01–P
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
National Institutes of Health
Center for Scientific Review; Notice of
Closed Meeting
Pursuant to section 10(d) of the
Federal Advisory Committee Act, as
amended, notice is hereby given of the
following meeting.
The meeting will be closed to the
public in accordance with the
provisions set forth in sections
552b(c)(4) and 552b(c)(6), Title 5 U.S.C.,
as amended. The grant applications and
the discussions could disclose
confidential trade secrets or commercial
property such as patentable material,
and personal information concerning
individuals associated with the grant
applications, the disclosure of which
would constitute a clearly unwarranted
invasion of personal privacy.
Name of Committee: Center for Scientific
Review Special Emphasis Panel; Member
Conflict: Vascular and Hematology.
Date: August 23, 2021.
Time: 2:00 p.m. to 5:00 p.m.
Agenda: To review and evaluate grant
applications.
Place: National Institutes of Health,
Rockledge II, 6701 Rockledge Drive,
Bethesda, MD 20892, (Virtual Meeting).
Contact Person: Larry Pinkus, Ph.D.
Scientific Review Officer, Center for
PO 00000
Frm 00085
Fmt 4703
Sfmt 4703
Scientific Review, National Institutes of
Health, 6701 Rockledge Drive, Room 4132,
MSC 7802 Bethesda, MD 20892, (301) 435–
1214, pinkusl@csr.nih.gov.
(Catalogue of Federal Domestic Assistance
Program Nos. 93.306, Comparative Medicine;
93.333, Clinical Research, 93.306, 93.333,
93.337, 93.393–93.396, 93.837–93.844,
93.846–93.878, 93.892, 93.893, National
Institutes of Health, HHS)
Dated: July 14, 2021.
Miguelina Perez,
Program Analyst, Office of Federal Advisory
Committee Policy.
[FR Doc. 2021–15329 Filed 7–19–21; 8:45 am]
BILLING CODE 4140–01–P
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
National Institutes of Health
National Institute of Allergy and
Infectious Diseases; Notice of Closed
Meeting
Pursuant to section 10(d) of the
Federal Advisory Committee Act, as
amended, notice is hereby given of the
following meeting.
The meeting will be closed to the
public in accordance with the
provisions set forth in sections
552b(c)(4) and 552b(c)(6), Title 5 U.S.C.,
as amended. The grant applications and
the discussions could disclose
confidential trade secrets or commercial
property such as patentable material,
and personal information concerning
individuals associated with the grant
applications, the disclosure of which
would constitute a clearly unwarranted
invasion of personal privacy.
Name of Committee: National Institute of
Allergy and Infectious Diseases Special
Emphasis Panel; NIAID Clinical Trial
Planning Grant (R34 Clinical Trials Not
Allowed) and NIAID Clinical Trial
Implementation Cooperative Agreement (U01
Clinical Trial Required).
Date: August 16, 2021.
Time: 1:00 p.m. to 5:00 p.m.
Agenda: To review and evaluate grant
applications.
Place: National Institute of Allergy and
Infectious Diseases, National Institutes of
Health, 5601 Fishers Lane, Room 3G58,
Rockville, MD 20892 (Virtual Meeting).
Contact Person: Anuja Mathew, Ph.D.,
Scientific Review Officer, Scientific Review
Program, Division of Extramural Activities,
National Institute of Allergy and Infectious
Diseases, National Institutes of Health, 5601
Fishers Lane, Room 3G58, Rockville, MD
20852, 301–761–6911, anuja.mathew@
nih.gov.
(Catalogue of Federal Domestic Assistance
Program Nos. 93.855, Allergy, Immunology,
and Transplantation Research; 93.856,
Microbiology and Infectious Diseases
Research, National Institutes of Health, HHS)
E:\FR\FM\20JYN1.SGM
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]]>Agencies
[Federal Register Volume 86, Number 136 (Tuesday, July 20, 2021)]
[Notices]
[Pages 38343-38348]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-15350]
=======================================================================
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FEDERAL TRADE COMMISSION
[File No. 201 0108]
Seven & i Holdings Co., Ltd.; Analysis of Agreement Containing
Consent Orders To Aid Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed consent agreement; request for comment.
-----------------------------------------------------------------------
SUMMARY: The consent agreement in this matter settles alleged
violations of federal law prohibiting unfair methods of competition.
The attached Analysis of Proposed Consent Orders to Aid Public Comment
describes both the allegations in the complaint and the terms of the
consent orders--embodied in the consent agreement--that would settle
these allegations.
DATES: Comments must be received on or before August 19, 2021.
ADDRESSES: Interested parties may file comments online or on paper, by
following the instructions in the Request for Comment part of the
SUPPLEMENTARY INFORMATION section below. Please write: ``Seven & i
Holdings Co., Ltd.; File No. 201 0108'' on your comment, and file your
comment online at www.regulations.gov by following the instructions on
the web-based form. If you prefer to file your comment on paper, please
mail your comment to the following address: Federal Trade Commission,
Office of the Secretary, 600 Pennsylvania Avenue NW, Suite CC-5610
(Annex D), Washington, DC 20580; or deliver your comment to the
following address: Federal Trade Commission, Office of the Secretary,
Constitution Center, 400 7th Street SW, 5th Floor, Suite 5610 (Annex
D), Washington, DC 20024.
FOR FURTHER INFORMATION CONTACT: Nicholas Bush (202-326-2848), Bureau
of Competition, Federal Trade Commission, 600 Pennsylvania Avenue NW,
Washington, DC 20580.
SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34,
notice is hereby given that the above-captioned consent agreement
containing a consent order to cease and desist, having been filed with
and accepted, subject to final approval, by the Commission, has been
placed on the public record for a period of thirty (30) days. The
following Analysis of Agreement Containing Consent Orders to Aid Public
Comment describes the terms of the consent agreement and the
allegations in the complaint. An electronic copy of the full text of
the consent agreement package can be obtained from the FTC
[[Page 38344]]
website at this web address: https://www.ftc.gov/news-events/commission-actions.
You can file a comment online or on paper. For the Commission to
consider your comment, we must receive it on or before August 19, 2021.
Write ``Seven & i Holdings, Ltd.; File No. 201 0108'' on your comment.
Your comment--including your name and your state--will be placed on the
public record of this proceeding, including, to the extent practicable,
on the www.regulations.gov website.
Due to protective actions in response to the COVID-19 pandemic and
the agency's heightened security screening, postal mail addressed to
the Commission will be subject to delay. We strongly encourage you to
submit your comments online through the www.regulations.gov website.
If you prefer to file your comment on paper, write ``Seven & i
Holdings, Ltd.; File No. 201 0108'' on your comment and on the
envelope, and mail your comment to the following address: Federal Trade
Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, Suite
CC-5610 (Annex D), Washington, DC 20580; or deliver your comment to the
following address: Federal Trade Commission, Office of the Secretary,
Constitution Center, 400 7th Street SW, 5th Floor, Suite 5610 (Annex
D), Washington, DC 20024. If possible, submit your paper comment to the
Commission by courier or overnight service.
Because your comment will be placed on the publicly accessible
website at www.regulations.gov, you are solely responsible for making
sure that your comment does not include any sensitive or confidential
information. In particular, your comment should not include any
sensitive personal information, such as your or anyone else's Social
Security number; date of birth; driver's license number or other state
identification number, or foreign country equivalent; passport number;
financial account number; or credit or debit card number. You are also
solely responsible for making sure your comment does not include any
sensitive health information, such as medical records or other
individually identifiable health information. In addition, your comment
should not include any ``trade secret or any commercial or financial
information which . . . is privileged or confidential''--as provided by
Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2),
16 CFR 4.10(a)(2)--including in particular competitively sensitive
information such as costs, sales statistics, inventories, formulas,
patterns, devices, manufacturing processes, or customer names.
Comments containing material for which confidential treatment is
requested must be filed in paper form, must be clearly labeled
``Confidential,'' and must comply with FTC Rule 4.9(c). In particular,
the written request for confidential treatment that accompanies the
comment must include the factual and legal basis for the request, and
must identify the specific portions of the comment to be withheld from
the public record. See FTC Rule 4.9(c). Your comment will be kept
confidential only if the General Counsel grants your request in
accordance with the law and the public interest. Once your comment has
been posted on www.regulations.gov--as legally required by FTC Rule
4.9(b)--we cannot redact or remove your comment from that website,
unless you submit a confidentiality request that meets the requirements
for such treatment under FTC Rule 4.9(c), and the General Counsel
grants that request.
Visit the FTC website at https://www.ftc.gov to read this Notice and
the news release describing this matter. The FTC Act and other laws
that the Commission administers permit the collection of public
comments to consider and use in this proceeding, as appropriate. The
Commission will consider all timely and responsive public comments that
it receives on or before August 19, 2021. For information on the
Commission's privacy policy, including routine uses permitted by the
Privacy Act, see https://www.ftc.gov/site-information/privacy-policy.
Analysis of Agreement Containing Consent Orders To Aid Public Comment
I. Introduction
The Federal Trade Commission (``Commission'') has accepted for
public comment, subject to final approval, an Agreement Containing
Consent Orders (``Consent Agreement'') from Seven & i Holdings Co.,
Ltd., a Japanese company, 7-Eleven, Inc., the U.S. subsidiary,
(collectively, ``7-Eleven'') and Marathon Petroleum Corporation
(``Marathon'') (collectively, the ``Respondents''). The Consent
Agreement is designed to remedy the anticompetitive effects that likely
are resulting from 7-Eleven's consummated acquisition of Marathon's
wholly-owned subsidiary Speedway LLC (``Speedway''). The Commission
also issued the Order to Maintain Assets included in the Consent
Agreement. Pursuant to Commission Rules of Practice, a consent
agreement was proposed prior to Respondents' consummation of the
transaction, but the Commission had not accepted the proposal because a
majority did not find certain provisions in the proposal sufficient to
fully resolve competitive concerns stemming from the transaction. 7-
Eleven closed on the acquisition on May 14, 2021 with full knowledge
the acquisition was in violation of Section 7 of the Clayton Act and
Section 5 of the FTC Act.
Respondents subsequently agreed to a revised proposed Decision and
Order (``Order''), described herein, that restores competition lost
from the transaction. Under the terms of the Order included in the
Consent Agreement, 7-Eleven must divest to Commission-approved Buyers
certain Speedway retail fuel outlets and related assets in 291 local
markets, and certain 7-Eleven retail fuel outlets and related assets in
2 local markets, across 20 states. The Order requires the divestitures
to take place no later than 180 days after May 14, 2021, the day 7-
Eleven closed on its acquisition of Marathon's assets. The Commission
prefers divestitures to upfront buyers that occur close in time with
the closing of the main transaction, but Commission orders will allow
for a longer divestiture period when specific, demonstrable
circumstances warrant. In this matter, the Commission recognizes that
the particular logistical and regulatory requirements of transferring
293 stations across 20 states necessitates a longer process of rolling
divestitures to three Buyers. To ensure that as many divestitures
happen as quickly as possible, the Order requires that 7-Eleven divests
the outlets to the Buyers based on the Buyer-approved divestiture
schedules incorporated into the Order, and that 7-Eleven meets specific
divestiture benchmarks at 90, 120, and 150 days.
The Order to Maintain Assets requires Respondents to operate and
maintain each divestiture outlet in the normal course of business
through the date the Commission-approved Buyer acquires the outlet. In
addition, the Order and Order to Maintain Assets require that until 7-
Eleven divests the outlets, it must maintain separate retail fuel
pricing teams and keep information related to pricing decisions for the
divestiture outlets separate from the retail fuel pricing for 7-
Eleven's other outlets.
The Order also prohibits 7-Eleven from enforcing noncompete
provisions in its franchise agreements against current franchisees or
others who might seek employment at the divestiture outlets. This
provision reduces the likelihood any 7-Eleven noncompete provisions
will have a chilling effect on
[[Page 38345]]
franchisees or others in seeking employment or doing business with the
divestiture outlets. Given that 7-Eleven consummated an illegal
transaction, expressly safeguarding the Buyers' access to essential
employees or business partners is particularly necessary to protect the
effectiveness of the divestitures.
The Commission has placed the Consent Agreement on the public
record for 30 days to solicit comments from interested persons.
Comments received during this period will become part of the public
record. After 30 days, the Commission will review the comments received
and decide whether it should withdraw, modify, or make the Order final.
II. The Respondents
Seven & i Holdings Co., Ltd., a publicly-traded company
headquartered in Tokyo, Japan, owns and operates convenience stores and
retail fuel outlets worldwide under the 7-Eleven brand. 7-Eleven, Inc.
owns, operates, and franchises approximately 9,000 stores in the United
States, making it the largest convenience store chain in the country.
Roughly 46 percent of 7-Eleven's stores offer fuel. 7-Eleven's revenue
in 2020 totaled over $20 billion, with fuel sales accounting for over
$13 billion.
Marathon, a publicly-traded company headquartered in Findlay, Ohio,
operates a vertically-integrated refining, marketing, retail, and
transportation system for petroleum and petroleum products. Marathon is
the largest U.S. refiner, with approximately 2.9 million barrels per
day of crude oil refining capacity. In 2020, Marathon's revenues
totaled over $69 billion. Marathon's former wholly-owned subsidiary,
Speedway, controls and sets retail fuel pricing at 3,898 retail
transportation fuel and convenience stores across the United States,
making it the third-largest domestic chain of company-owned and -
operated retail fuel outlets and convenience stores. Speedway's 2020
retail business revenues totaled over $19 billion, with sales of nearly
6 billion gallons of gasoline and diesel in 2019.
III. The Transaction
Pursuant to an Asset Purchase Agreement dated August 2, 2020, 7-
Eleven acquired substantially all of Marathon's Speedway retail assets
for approximately $21 billion, subject to adjustments (the
``Transaction''). 7-Eleven and Marathon also entered into a 15-year
agreement under which Marathon will supply and transport fuel to the
Speedway business, with a base volume of 7.7 billion gallons per year
of gasoline and diesel.
The Commission's Complaint alleges the Transaction violates Section
7 of the Clayton Act, as amended, 15 U.S.C. 18, and Section 5 of the
Federal Trade Commission Act, as amended, 15 U.S.C. 45, by
substantially lessening competition for the retail sale of gasoline
and/or the retail sale of diesel in 293 local markets across 20 states.
IV. The Retail Sale of Gasoline and Diesel
The Commission's Complaint alleges that relevant product markets in
which to analyze the Transaction are the retail sale of gasoline and
the retail sale of diesel. Consumers require gasoline for their
gasoline-powered vehicles and can purchase gasoline only at retail fuel
outlets. Likewise, consumers require diesel for their diesel-powered
vehicles and can purchase diesel only at retail fuel outlets. The
retail sale of gasoline and the retail sale of diesel constitute
separate relevant markets because the two are not interchangeable.
Vehicles that run on gasoline cannot run on diesel and vehicles that
run on diesel cannot run on gasoline.
The Commission's Complaint alleges 293 local relevant geographic
markets in which to assess the competitive effects of the Transaction
within the following states: Arizona; California; Florida; Illinois;
Indiana; Kentucky; Massachusetts; Michigan; North Carolina; New
Hampshire; Nevada; New York; Ohio; Pennsylvania; Rhode Island; South
Carolina; Tennessee; Utah; Virginia; and West Virginia.
The geographic markets for retail gasoline and retail diesel are
highly localized, depending on the unique circumstances of each area.
Each relevant market is distinct and fact-dependent, reflecting many
considerations, including commuting patterns, traffic flows, and outlet
characteristics. Consumers typically choose between nearby retail fuel
outlets with similar characteristics along their planned routes. The
geographic markets for the retail sale of diesel are similar to the
corresponding geographic markets for retail gasoline, as many diesel
consumers exhibit preferences and behaviors similar to those of
gasoline consumers.
The Transaction substantially lessens competition in each of these
local markets, resulting in 264 highly concentrated markets for the
retail sale of gasoline and 153 highly concentrated markets for the
retail sale of diesel fuel, with many of the 293 markets presenting
concerns for both products. Retail fuel outlets compete on price, store
format, product offerings, and location, and pay close attention to
competitors in close proximity, on similar traffic flows, and with
similar store characteristics. In each of the local gasoline and diesel
retail markets, the Transaction reduces the number of competitively
constraining independent market participants to three or fewer. 7-
Eleven will be able to raise prices unilaterally in markets where 7-
Eleven and Speedway are close competitors. Absent the Transaction, 7-
Eleven and Speedway would have continued to compete head to head in
these local markets.
Moreover, the Transaction enhances the incentives for
interdependent behavior in local markets where, including 7-Eleven,
only two or three competitively constraining independent market
participants remain. Two aspects of the retail fuel industry make it
vulnerable to such coordination. First, retail fuel outlets post their
fuel prices on price signs that are visible from the street, allowing
competitors easily to observe each other's fuel prices. Second, retail
fuel outlets regularly track their competitors' fuel prices and change
their own prices in response. These repeated interactions give retail
fuel outlets familiarity with how their competitors price and how
changing prices affect fuel sales.
Entry into each relevant market will not be timely, likely, or
sufficient to deter or counteract the anticompetitive effects arising
from the Transaction. Significant entry barriers include the
availability of attractive real estate, the time and cost associated
with constructing a new retail fuel outlet, and the time associated
with obtaining necessary permits and approvals.
V. The Order
The Order remedies the Transaction's likely anticompetitive effects
by requiring 7-Eleven to divest Speedway retail fuel outlets in 291
local markets, and 7-Eleven retail fuel outlets in 2 local markets, in
three separate packages, to CrossAmerica Partners LP (``CAPL''),
Jacksons Food Stores, Inc. (``Jacksons''), and Anabi Oil Corporation
(``Anabi'') (collectively, the ``Buyers'').
CAPL is a publicly-traded master limited partnership and a
wholesale supplier of motor fuels, a convenience store operator, and an
owner and lessor of real estate used in the retail distribution of
motor fuels. CAPL distributes branded and unbranded fuel to
approximately 1,800 locations and owns or leases approximately 1,100
sites, including 150 company-operated sites.
[[Page 38346]]
In 2020, the Commission fined Alimentation Couche-Tard Inc.
(``ACT'') and its then-affiliate CAPL $3.5 million to settle
allegations that the companies violated a 2018 Commission order
requiring divestitures of 10 retail fuel outlets related to ACT's
acquisition of Holiday Companies. ACT controlled CAPL's general partner
when the alleged order violation occurred and agreed to divest a
package of retail fuel outlets that were part of CAPL's retail network
to resolve the Commission's concerns. The alleged order violation
resulted from, among other things, ACT's failure to divest the CAPL
outlets by the Commission-imposed deadline.
The alleged violation does not disqualify CAPL from consideration
as an acceptable buyer in this instance. CAPL has not been affiliated
with ACT in any way since November 2019, when Mr. Joseph V. Topper, Jr.
and his organization, the Topper Group, acquired the controlling
interest in CAPL's general partner from ACT, and thereby severed
completely CAPL's affiliation with ACT. CAPL has since revamped its
management. Mr. Topper now serves as CAPL's chairman of the board, and
he and his organization have the ability to appoint all members of
CAPL's board as well as control CAPL's operations and activities.
Moreover, prior to Mr. Topper acquiring control of CAPL, ACT agreed to
indemnify CAPL for penalties and legal costs associated with the
alleged order violation.
The two other Buyers are Jacksons and Anabi. Jacksons is a
privately-held corporation that controls a chain of over 230 Chevron-,
Shell-, and Texaco-branded retail fuel locations in six western states.
Jacksons also is a joint venture partner in Jackson Energy, a wholesale
fuel supply company that distributes gasoline and diesel fuel to retail
fuel outlets in the western United States. Anabi, a privately-owned and
operated retail fuel supplier, is one of the largest Shell-branded
distributors in California and controls retail fuel locations in
California, Nevada, and Alaska. The Commission is satisfied that the
Buyers present no competitive problems in markets where they will
acquire divested assets and are otherwise qualified to acquire and
operate the assets in their respective divestiture packages.
The Order requires 7-Eleven to divest: (a) 105 Speedway retail fuel
outlets and a single 7-Eleven retail fuel outlet to CAPL; (b) 63
Speedway retail fuel outlets to Jacksons; and (c) 123 Speedway retail
fuel outlets and a single 7-Eleven retail fuel outlet to Anabi. To
ensure that 7-Eleven is incentivized to complete all of the
divestitures in an expedient manner, the Order requires 7-Eleven to:
(1) Divest on Buyer-approved divestiture schedules, and (2) divest no
fewer than a certain number of outlets at certain points within the 180
day divestiture period.
Specifically, Paragraph II.A of the Order requires Respondents to
divest pursuant to the Buyer-approved divestiture schedules. Under
Paragraph XI.A.1 of the Order, 7-Eleven is required to submit to the
Commission the Buyer-approved divestiture schedules--identifying the
divestiture date for each location--within 60 days after May 14. The
Buyers will control the divestiture schedules, and those schedules are
enforceable by the Commission against 7-Eleven. The Order also requires
7-Eleven to meet certain divestiture benchmarks--with no fewer than 20
percent of each package divested within 90 days, an additional 20
percent of each package divested within 120 days, and an additional 20
percent of each package divested within 150 days of the main
Transaction closing. 7-Eleven will have to complete all of the
divestitures within 180 days. Taken together, this divestiture process
will incentivize 7-Eleven to complete the divestitures in a timely and
expeditious manner, and give the Commission close oversight into the
divestiture schedules.
The Order contains additional provisions designed to ensure the
effectiveness of the relief, and to prevent 7-Eleven from having access
to critical competitive information regarding the divestiture outlets.
The Order requires 7-Eleven and Marathon to maintain the economic
viability, marketability, and competitiveness of each divestiture asset
until the divestitures are complete. Also, the Order requires
Respondents to designate an Asset Maintenance Manager to oversee
operations of the divestiture assets to ensure the Respondents maintain
the divestiture assets' full economic viability, marketability, and
competitiveness until the divestitures are completed and to help
facilitate the transfer of the divestiture assets to the Buyers.
Additionally, the Order requires the Respondents to establish a
divestiture pricing team that will handle retail fuel pricing at the
divestiture outlets, and to prevent access and disclosure of that
pricing information to anyone other than the divestiture pricing team.
The Asset Maintenance Manager will oversee the divestiture pricing team
to ensure that confidential pricing information is not shared with
other employees at 7-Eleven who may price retail fuel at competing
stations. The Order requires the Respondents to institute information
technology procedures, authorizations, protocols, and any other
controls necessary to prevent unauthorized disclosure or access of
information to or from the divestiture pricing team. Finally, the Order
appoints The Claro Group as an independent third-party Monitor to
oversee the Respondents' compliance with the requirements of the Order
and to oversee the Asset Maintenance Manager.
The Order also contains provisions regarding Respondents' employees
and franchisees, designed to protect the viability of the divestiture
assets. Section V contains provisions to ensure that the Buyers face no
impediments in hiring employees necessary to operate the divestiture
assets as competitively as Speedway operated them before the
Transaction. Paragraph V.E prohibits 7-Eleven from enforcing noncompete
provisions against current franchisees or others who might seek
employment at the divestiture outlets. This provision reduces the
likelihood that the noncompete provisions will have a chilling effect
on franchisees or others in seeking employment or doing business with
the divestiture outlets. Given that 7-Eleven has consummated an illegal
transaction, expressly safeguarding the Buyers' access to essential
employees or business partners is particularly necessary to protect the
effectiveness of the divestitures.
In addition to requiring retail fuel outlet divestitures, the Order
also requires 7-Eleven, for a period of five years, to obtain prior
Commission approval before purchasing any of the divested outlets, and
for a period of ten years, to provide the Commission prior notice of
future acquisitions of the divested outlets and of Commission-
identified retail fuel outlets located in the 293 local markets at
issue and three additional markets. These three additional markets
raised concerns that are addressed by Speedway's near-term exit from
the markets for reasons outside its control. The prior notice provision
is necessary because an acquisition in close proximity to divested
assets likely would raise the same competitive concerns as the
Transaction and may fall below the Hart-Scott-Rodino Act premerger
notification thresholds.
The purpose of this analysis is to facilitate public comment on the
Order, and the Commission does not intend this analysis to constitute
an official interpretation of the Order or to modify its terms in any
way. The Offices of the California and Florida Attorneys General
participated in both the investigation and the consent process.
[[Page 38347]]
By direction of the Commission, Chair Lina Khan not
participating.
April J. Tabor,
Secretary.
Joint Concurring Statement of Commissioners Rebecca Kelly Slaughter and
Rohit Chopra
Today, the Commission accepted for public comment an order that
would resolve competitive concerns raised by the illegal acquisition of
a Marathon Petroleum subsidiary by Seven & i Holdings (collectively
``7-Eleven''). The approximately $21 billion deal involved nearly 4,000
retail fuel and convenience store locations. On May 14, 2021, the
parties consummated the deal, despite knowing that the Commission had
outstanding--but resolvable--concerns about the transaction and about
the parties' proposal to resolve those concerns at the time. The
agreement to merge and the decision to consummate substantially
lessened competition in 293 local geographic markets across twenty
states, in violation of Section 5 of the FTC Act and Section 7 of the
Clayton Act. While Commission staff had worked diligently to resolve
the competitive concerns raised by the transaction, negotiating
hundreds of divestitures to three different buyers, the parties had not
reached a settlement that the Commission could accept when they closed.
The job of the Commission is to pursue the correct outcome in
cases, not the expedient one. Here, it was important to take the few
extra weeks necessary to ensure that the resolution would effectively
preserve competition and that any risk would be borne by the parties,
not by consumers, workers, and other market participants. Today's
settlement achieves that in a few key ways.
First, the order holds 7-Eleven accountable for executing
divestitures quickly and efficiently. The Commission's general
preference is for divestitures to happen as close in time to the
transaction as is practicable in order to protect competition.\1\ Here,
given the scope and complexity of the required divestitures, a longer
end date is justified, provided the divestitures happen on an ongoing
basis. Today's proposal includes provisions with rolling divestiture
timelines, benchmarked at 90, 120, and 150 days, and completed within
180 days from May 14, 2021--the date of the illegal merger. If 7-Eleven
fails to follow these benchmarks and the buyers' schedules, 7-Eleven
will be in violation of today's proposed order.
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\1\ See, e.g., Press Release, Fed. Trade Comm'n, FTC Requires
Divestitures as Condition of 7-Eleven, Inc. Parent Company's $3.3
Billion Acquisition of Nearly 1,100 Retail Fuel Outlets from
Competitor Sunoco (Jan. 18, 2020), https://www.ftc.gov/news-events/press-releases/2018/01/ftc-requires-divestitures-condition-7-eleven-inc-parent-companys (requiring the parties divest 26 stations over
the course of 90 days); Press Release, Fed. Trade Comm'n, FTC
Approves Final Order Imposing Conditions on Arko Holdings Ltd.'s
Acquisition of Empire Petroleum Partners, LLC (Oct. 7, 2020),
https://www.ftc.gov/news-events/press-releases/2020/10/ftc-approves-final-order-imposing-conditions-arko-holdings-ltds (ordering
divestiture of 7 stations over the course of 20 days); Press
Release, Fed. Trade Comm'n, FTC Approves Final Order Imposing
Conditions on Tri Star Energy, LLC's Acquisition of Certain Assets
of Hollingsworth Oil Company, Inc., C & H Properties, and Ronald L.
Hollingsworth (Aug. 14, 2020), https://www.ftc.gov/news-events/press-releases/2020/08/ftc-approves-final-order-imposing-conditions-tri-star-energy (ordering divestiture of 2 stations over the course
of 10 days); but see Press Release, Fed. Trade Comm'n, FTC Requires
Retail Fuel Station and Convenience Store Operator Alimentation
Couche-Tard Inc. and its affiliate CrossAmerica Partners LP to
Divest 10 Fuel Stations in Minnesota and Wisconsin as a Condition of
Acquiring Holiday Companies (Dec. 15, 2017), https://www.ftc.gov/news-events/press-releases/2017/12/ftc-requires-retail-fuel-station-convenience-store-operator (allowing 120 days to find a buyer for
and divest 10 stations; the Commission later alleged the parties
violated the divestiture order, and the parties agreed to pay a $3.5
million civil penalty to the FTC to settle those allegations).
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Second, 7-Eleven will be prohibited from enforcing noncompete
provisions against current franchisees or others who might seek
employment at the divestiture outlets. Noncompete provisions generally
prevent workers and small business franchises from fairly bargaining
for employment and opportunity. In this instance, they could also
prevent divestiture buyers from accessing the talent that could best
facilitate their ability to restore competition in the relevant
markets. The prohibition in the order is consistent with prior
Commission action,\2\ but is especially important in this case, given
that 7-Eleven consummated an illegal transaction. Expressly
safeguarding the buyers' access to essential employees or business
partners is particularly necessary to protect the effectiveness of the
divestitures.
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\2\ See Statement of Commissioners Rohit Chopra and Rebecca
Kelly Slaughter in the Matter of DTE Energy/Generation Pipeline,
Fed. Trade Comm'n (Sept. 12, 2019), https://www.ftc.gov/system/files/documents/public_statements/1544138/joint_statement_of_chopra_and_slaughter_dte_energy-generation_pipeline_9-13-19.pdf; Press Release, Fed. Trade Comm'n,
FTC Approves Final Order Imposing Conditions on Merger of Air
Medical Group Holdings, Inc. and AMR Holdco, Inc. (May 3, 2018),
https://www.ftc.gov/news-events/press-releases/2018/05/ftc-approves-final-order-imposing-conditions-merger-air-medical (divestiture of
air ambulance services in Hawaii).
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The terms of this order are well-grounded in Commission precedent
and reflect learned experience from past orders. The Commission's past
experiences show that divestitures that are not carefully constructed
end up failing to adequately protect consumers, workers, and
competition.\3\ It is disturbing that 7-Eleven failed to resolve these
matters before consummating their illegal transaction. Typically,
merging parties will wait for the Commission to accept an order for
public comment before closing on their transaction. Here, the
transaction involved billions of dollars in thousands of unique
geographic markets across the United States; when parties propose
transactions this large and complex, with obvious violations of the
law, they must accept that proper review may take time. Notwithstanding
that scope, in this case, Commission staff conducted an extensive
investigation, identified overlaps, vetted divestiture buyers, and
negotiated terms of divestitures with the parties--all in a matter of
months. Working through the remaining concerns at the Commission level
would not have been and was not time-consuming.
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\3\ See Press Release, Fed. Trade Comm'n, FTC Releases Staff
Study Examining Commission Merger Remedies between 2006 and 2012
(Feb. 3, 2017), https://www.ftc.gov/news-events/press-releases/2017/02/ftc-releases-staff-study-examining-commission-merger-remedies;
Fed. Trade Comm'n, A Study of the Commission's Divestiture Process
(1999), https://www.ftc.gov/sites/default/files/documents/reports/study-commissions-divestiture-process/divestiture_0.pdf.
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7-Eleven chose to close under a cloud of legal uncertainty rather
than to resolve its issues with the Commission; it learned that this
Commission will not be dared into accepting settlements we do not find
adequate. We hope other parties will learn that working constructively
with the Commission--rather than consummating an illegal merger--is a
more effective and responsible path.
Statement of Commissioners Noah Joshua Phillips and Christine S. Wilson
Today, the Federal Trade Commission has accepted for public comment
a consent agreement resolving all competition concerns presented by
Seven & i Holdings Co.'s acquisition of nearly 4,000 gas stations from
Marathon Petroleum Corporation. A settlement in this matter is long
overdue. As we noted in our statement of May 14, 2021,\1\ the day on
which the parties consummated their transaction, the Commission had
[[Page 38348]]
ample opportunity to act before the parties merged.\2\
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\1\ See Statement of Commissioners Noah Joshua Phillips &
Christine S. Wilson, Seven & i Holdings Co., Ltd./Marathon Petroleum
Corp., FTC File No. 201-0108 (May 14, 2021), https://www.ftc.gov/system/files/documents/publicstatements/1590067/2010108sevenmarathonphillipswilsonstatement.pdf.
\2\ Indeed, the settlement before the Commission on May 14
required the divestiture of 293 fuel outlets, see Press Release, 7-
Eleven Inc., Response to FTC Commissioner Statement (May 14, 2021),
https://corp.7-eleven.com/corppress-releases/05-14-2021-7-eleven-inc-response-to-ftc-commissioner-statement; and the settlement
unanimously accepted by the Commission today similarly requires the
divestiture of 293 fuel outlets. Commissioners Slaughter and Chopra
highlight the order provision that prohibits Seven & i's subsidiary
7-Eleven from enforcing noncompete provisions against current
franchisees or others who might seek employment at the divestiture
outlets. This narrow provision is consistent with previous
Commission orders that impose conditions to ensure that divested
assets have access to the employees necessary to ensure the success
of the divestiture.
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To the extent the Analysis to Aid Public Comment or other
statements issued suggest that Seven & i Holdings or its U.S.
subsidiary 7-Eleven Inc. acted in bad faith, the public is free to read
our earlier statement and Seven & i Holding's side of the story,\3\ the
veracity of which no commissioner has disputed in the month since they
were issued. Those accounts paint a different, and regrettable, picture
of what happened.
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\3\ Statement of Commissioners Noah Joshua Phillips & Christine
S. Wilson, supra note 1; Press Release, 7-Eleven, Inc., supra note
2.
We thank our staff for their diligence, professionalism, and
responsiveness throughout this process; the Commission's failures here
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are in no way a reflection of their efforts.
[FR Doc. 2021-15350 Filed 7-19-21; 8:45 am]
BILLING CODE 6750-01-P
