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NEW YORK -- ConocoPhillips signed an agreement with Alimentation Couche-Tard Inc. for the sale of the capital stock of the Circle K Corp., which includes its retail marketing outlets, brand name and franchisee operations. Closing is expected in the fourth quarter, and proceeds from the sale are expected to reduce debt, according to reports.
As part of the agreement, ConocoPhillips will continue to supply 1.2 billion gallons of gasoline per year for the next two to five years at market-related pricing.
"This agreement is a significant step toward the planned rationalization of our downstream portfolio," said Jim Nokes, executive vice president of refining, marketing, supply and transportation at ConocoPhillips. "Completion of this sale will mark the beginning of a stronger focus on our wholesale channels of trade. The sale of this business and various retail marketing asset packages will enable us to reallocate capital to projects that provide higher returns."
As a result of this transaction, ConocoPhillips expects its number of employees to fall from approximately 55,800 to around 38,400 worldwide. It is expected that Alimentation Couche-Tard will rehire the majority of displaced ConocoPhillips employees associated with this transaction.
ConocoPhillips announced late last year that it would sell a substantial portion of its retail marketing assets and exit certain geographic regions. Once the planned dispositions are complete, ConocoPhillips plans to focus on operating its wholesale business, but will retain and operate approximately 300 to 350 retail outlets that complement its refining and transportation network. These outlets will be located primarily in the Central and West Coast regions of the United States, and will utilize the company's three core brands:
Conoco, Phillips 66 and 76.