Delek completes acquisition of Mepco Express filling stations

Delek Group said that it has completed its acquisition of 234 gas stations and convenience stores in the US for $ 234.5 mm. The acquisition consists of 198 Mapco Express filling stations and convenience stores in Tennessee in consideration for $ 147 mm and 36 East Coast convenience store-gas stations in Virginia for $ 36.5 mm The concerns will continue to carry their respective brands names following the transaction.
Delek also announced that it is in the process of establishing Delek USA, a wholly owned US-based subsidiary which will conduct the company's American operations. The investment marks the Netanya-based company's first entrance into the overseas retail gasoline markets. Company president Avinoam Finkelman said that the decision to enter international markets is mostly due to eroding returns in the domestic market, a product, he believes of increased competition and government regulatory activity.

Delek, which operates 216 domestic filling station, is the second major Israeli concern to enter the US market. Last year, Alon Israel Oil acquired most of the US operations of TotalFinaElf, a French-based energy giant, in a deal worth hundreds of millions of dollars. More recently, Alon acquired Texas-based Southwest Convenience Stores, which operates 711 stores and gas stations in the south-western region.
Delek also released its first quarter results after the close of trading, saying that net income fell 77.7 % to NIS 24.1 mm, or NIS 2.48 per share, from NIS 108.2 mm, or NIS 11.17 per share, in the same period last year. Revenues declined 10 % to NIS 1.8 bn from the NIS 2 bn recorded in 2000. Operating income for the quarter fell 0.2 % to NIS 129.9 mm from NIS 130.2 mm last year.