British Energy Giant BP To Spend $1.3 Billion Buying Footing Into US Fuel Center Market

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Mary Rooke Commentary and Analysis Writer
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London-listed energy company, BP, announced Thursday it will spend over $1 billion to acquire a top U.S. full-service travel center network.

BP will buy TravelCenters of America (TA), which boasts 280 locations across 44 U.S. states, in a $1.3 billion all-cash deal that will give the energy giant “growth opportunities for 4 of bp’s 5 transition growth engines,” according to the company’s press release.

The five strategic transition growth engines for BP include convenience, EV charging, biofuels, renewable natural gas (RNG) and hydrogen, the company stated. BP said it hopes purchasing TA will give the company an instant boost in its “convenience” category nationwide due to “TA’s strategically-located network of highway sites” that will combine with its “predominantly off-highway convenience and mobility business.”

BP currently has over 8,000 off-highway locations, chairman and president of BP America, Dave Lawler, said in the company’s press release.

“These travel centers, which average around 25 acres, offer a full range of facilities for vehicles and fleet trucks, including more than 600 full-service and quick service restaurants, as well as truck maintenance and repair services,” according to the company. “Around 70% of TA’s total gross margin is generated by its convenience services business, almost double bp’s global convenience gross margin.”

The energy company is seeking to significantly grow investments in its convenience category related to bioenergy and electric vehicle (EV) charging, aiming to put half of its cumulative $55-65 billion investment into these transition growth engines from 2023-2030, according to the press release.

BP announced Wednesday it plans to invest $1 billion into increasing its ability to offer EV charging stations globally by 2030. (RELATED: Americans Getting Poorer As Real Disposable Income Plummets Over A Trillion Dollars In 2022)

“This is bp’s strategy in action. We are doing exactly what we said we would, leaning into our transition growth engines. This deal will grow our convenience and mobility footprint across the US and grow earnings with attractive returns. Over time, it will allow us to advance four of our five strategic transition growth engines. By enabling growth in EV charging, biofuels and RNG and later hydrogen, we can help our customers decarbonize their fleets. It’s a compelling combination,” BP CEO Bernard Looney said in the press release.

BP is using Goldman Sachs & Co. LLC and Robey Warshaw LLP as financial advisors and Sullivan & Cromwell LLP as legal advisors in the deal.