EL PASO, Texas (Border Report) – Mexican convenience store giant FEMSA has reached a deal with a Tennessee energy company to take over 249 corner food marts in Texas and New Mexico.
The $385 million deal between FEMSA and Delek U.S. Holdings includes inventory and a small fuel transportation fleet, the companies said in separate news releases on Thursday.
FEMSA, based in Monterrey, operates 30,000 Oxxo convenience stores in Mexico, Chile, Colombia, Peru and Brazil. FEMSA is an acronym for Fomento Economico Mexicano S.A.B. de C.V.
“At FEMSA, we have a long-held ambition to enter the U.S. convenience and mobility industry, and this transaction represents the ideal way for us to take our first step in this compelling market,” said Jose Antonio Fernández Garza-Lagüera, CEO of FEMSA retail operations.
Almost all Delek’s stores include a gas station under the DK and Alon brands. The company has assets in petroleum refining, logistics, pipelines, renewable fuels and convenience stores. It is based in Nashville and 90 percent of its convenience stores are in Texas, with most of the rest in New Mexico and a few in Arkansas.
People outside a local Oxxo shop, a Mexican chain of convenience store.
On Sunday, November 14, 2021, in Tulum, Quintana Roo, Mexico. (Photo by Artur Widak/NurPhoto via Getty Images)
The American company expects to supply the stores being acquired by its new Mexican partner.
The deal “allows us to gain a competitive partner for ongoing and expanded retail fuel sales. We look forward to building on this partnership with FEMSA in both the short and long-term,” said Avigail Soreq, president and CEO of Delek. “The transaction creates an exciting opportunity for Delek US Retail and its employees as they become part of FEMSA’s growth strategy in the United States.”
FEMSA officials are banking on the company’s 45 years of experience in the retail business to make the broad jump into the U.S. a success. They’re also aware many Texas residents with ties to Mexico may already be familiar with the Oxxo brand.
“Through Oxxo, FEMSA has built considerable experience and expertise developing core retail capabilities for store expansion, procurement, supply chain, segmentation, and pricing,” the company said in its release. “These capabilities will be invaluable as the company launches and pursues its U.S. convenience strategy. While the strategy is ultimately broader than any single region or target demographic, the appeal of the Oxxo brand may be relevant in certain markets served by the DK stores.”
The transaction is subject to regulatory approval in the U.S. The partners said they expect that to happen during the second half of 2024.
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