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KNOXVILLE, Tenn. and OGDEN, Utah -- To alleviate concerns about the antitrust implications of its merger, Pilot Travel Centers and Flying J plan to divest roughly 30 locations to Love's Travel Stops and Country Stores for an estimated price of $100 million to $150 million, or $3 million to $5 million a location, The Trucker News Services reported.
An analysis of the combined market share resulting from the combination of the Pilot and Flying J locations indicates that the new entity would have 16 percent of the interstate locations and 23 percent of the fuel lanes, according to the report. Of the sites to be sold, 10 to 15 are Pilot locations.
However, one knowledgeable industry source believes the combined market share of the Pilot and Flying J locations would exceed 50 percent of the interstate diesel fuel market because these two operations, along with TravelCenters of America and Petro Stopping Centers, have a disproportionately higher share of business among the large national trucking companies given their extensive national networks.
As a result, Pilot, the market leader, and Flying J, No. 3 behind TA/Petro, would have significantly greater purchasing power and would therefore be able to gain even a greater market share because of its enhanced pricing power, not dissimilar to Walmart, the report stated.
As a result, the Federal Trade Commission (FTC) has significant concerns about antitrust implications of this combination, the report stated.
Meanwhile, this deal makes sense for Love's because it will allow the Oklahoma City, Okla.-based company to expand its regional presence from 5.5 percent to 6.9 percent of the interstate fuel lanes -- or about 60 percent and 30 percent of the fuel lanes for TA/Petro and Pilot/Flying J, respectively.