Phillips 66 announces agreement to sell interest in Switzerland-based joint venture

Rhea-AI Summary

Phillips 66 (NYSE:PSX) has announced that its subsidiary, Phillips 66 , will sell its 49% non-operated equity interest in Coop Mineraloel AG (CMA) to its Swiss joint venture partner. The company will receive 1.06 billion Swiss francs (approximately $1.24 billion), including a 1 billion Swiss franc sales price and an assumed dividend of 60 million Swiss francs for 2024.

This transaction is part of Phillips 66's commitment to over $3 billion in divestitures. CMA operates 324 retail sites and petrol stations across Switzerland. The sale proceeds will support Phillips 66's strategic priorities, including returns to shareholders. The transaction is subject to approval by the Swiss Competition Commission and is expected to close in the first quarter of 2025.

Positive

• Sale of 49% stake in CMA for approximately $1.24 billion
• Progress towards $3 billion divestiture goal
• Proceeds to support strategic priorities and shareholder returns

Negative

• Loss of revenue stream from 324 retail sites and petrol stations in Switzerland

Insights

Financial Analyst

This divestiture is a strategic move for Phillips 66, aligning with their commitment to over $3 billion in asset sales. The $1.24 billion transaction value, including the $1.17 billion sales price and $70 million dividend, represents a significant cash influx. This deal will strengthen PSX's balance sheet and provide flexibility for shareholder returns or strategic investments.

The sale of the 49% stake in CMA, a non-core asset, demonstrates PSX's focus on portfolio optimization. By divesting from the Swiss retail and petrol station business, Phillips 66 can redirect resources to higher-growth or more strategically aligned areas. This move may positively impact the company's operational efficiency and return on capital employed.

Investors should note the expected Q1 2025 closing, subject to regulatory approval. This timeline allows for careful planning of proceeds allocation. The market will likely view this as a positive step in PSX's strategic realignment, potentially supporting the stock price in the near term.

Market Research Analyst

The divestiture of Phillips 66's stake in CMA reflects a broader trend in the oil and gas industry towards portfolio rationalization and focus on core assets. This move aligns with investor expectations for streamlined operations and improved capital allocation in the sector.

The Swiss retail market, while stable, may offer growth potential compared to other regions or segments. By exiting this joint venture, PSX can redeploy capital to areas with higher growth prospects or better synergies with its core operations. This strategic shift could enhance the company's long-term competitive position and valuation multiples.

The transaction's structure, including the assumed dividend, demonstrates PSX's ability to extract value from non-core assets. This deal may set a benchmark for similar transactions in the European downstream market, potentially influencing valuations of comparable assets held by peers.

HOUSTON--(BUSINESS WIRE)-- Phillips 66 (NYSE:PSX) announced today that its subsidiary, Phillips 66 Limited, has entered into a definitive agreement to sell its 49 percent non-operated equity interest in Coop Mineraloel AG (“CMA”) to its Swiss joint venture partner. It will receive cash of 1.06 billion Swiss francs (approximately $1.24 billion) consisting of a 1 billion Swiss franc sales price (approximately $1.17 billion) and an assumed dividend of 60 million Swiss francs (approximately $70 million) for financial year 2024 to be paid at or prior to closing. The sales price is subject to adjustment based on the amount of the dividend.

“This transaction marks significant progress in delivering on our commitment of over $3 billion in divestitures,” said Mark Lashier, chairman and CEO of Phillips 66. “As we manage our portfolio, we will continue to evaluate monetization of assets that no longer fit our long-term strategy.”

CMA operates 324 retail sites and petrol stations across Switzerland.

Proceeds from the sale will support the strategic priorities of Phillips 66, including returns to shareholders.

The transaction is subject to approval by the Swiss Competition Commission. It is expected to close in the first quarter of 2025.

About Phillips 66

Phillips 66 (NYSE: PSX) is a leading integrated downstream energy provider that manufactures, transports and markets products that drive the global economy. The company’s portfolio includes Midstream, Chemicals, Refining, Marketing and Specialties, and Renewable Fuels businesses. Headquartered in Houston, Phillips 66 has employees around the globe who are committed to safely and reliably providing energy and improving lives while pursuing a lower-carbon future. For more information, visit phillips66.com or follow @Phillips66Co on LinkedIn.

CAUTIONARY STATEMENT FOR THE PURPOSES OF THE “SAFE HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

^{This news release contains forward-looking statements within the meaning of the federal securities laws with respect to the sale of Phillips 66’s 49 percent non-operated equity interest in Coop Mineraloel AG. Words such as “anticipated,” “estimated,” “expected,” “planned,” “scheduled,” “targeted,” “believe,” “continue,” “intend,” “will,” “would,” “objective,” “goal,” “project,” “efforts,” “strategies” and similar expressions that convey the prospective nature of events or outcomes generally indicate forward-looking statements. However, the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements included in this news release are based on management’s expectations, estimates and projections as of the date they are made. These statements are not guarantees of future events or performance, and you should not unduly rely on them as they involve certain risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. Factors that could cause actual results or events to differ materially from those described in the forward-looking statements include: any delay in, or inability to obtain, necessary regulatory approvals, including from the Swiss Competition Commission; changes in governmental policies or laws that relate to our operations, including regulations that seek to limit or restrict refining, marketing and midstream operations or regulate profits, pricing, or taxation of our products or feedstocks, or other regulations that restrict feedstock imports or product exports; our ability to timely obtain or maintain permits necessary for projects; fluctuations in NGL, crude oil, refined petroleum, renewable fuels and natural gas prices, and refining, marketing and petrochemical margins; the effects of any widespread public health crisis and its negative impact on commercial activity and demand for refined petroleum or renewable fuels products; changes to worldwide government policies relating to renewable fuels and greenhouse gas emissions that adversely affect programs including the renewable fuel standards program, low carbon fuel standards and tax credits for biofuels; unexpected changes in costs for constructing, modifying or operating our facilities; our ability to successfully complete, or any material delay in the completion of, any asset disposition, acquisition or conversion that we may pursue; unexpected difficulties in manufacturing, refining or transporting our products; the level and success of drilling and production volumes around our midstream assets; risks and uncertainties with respect to the actions of actual or potential competitive suppliers and transporters of refined petroleum products, renewable fuels or specialty products; lack of, or disruptions in, adequate and reliable transportation for our products; potential liability from litigation or for remedial actions, including removal and reclamation obligations under environmental regulations; failure to complete construction of capital projects on time and within budget; our ability to comply with governmental regulations or make capital expenditures to maintain compliance with laws; limited access to capital or significantly higher cost of capital related to illiquidity or uncertainty in the domestic or international financial markets, which may also impact our ability to repurchase shares and declare and pay dividends; potential disruption of our operations due to accidents, weather events, including as a result of climate change, acts of terrorism or cyberattacks; general domestic and international economic and political developments, including armed hostilities (such as the Russia-Ukraine war), expropriation of assets, and other diplomatic developments; international monetary conditions and exchange controls; changes in estimates or projections used to assess fair value of intangible assets, goodwill and property and equipment and/or strategic decisions with respect to our asset portfolio that cause impairment charges; investments required, or reduced demand for products, as a result of environmental rules and regulations; changes in tax, environmental and other laws and regulations (including alternative energy mandates); political and societal concerns about climate change that could result in changes to our business or increase expenditures, including litigation-related expenses; the operation, financing and distribution decisions of equity affiliates we do not control; and other economic, business, competitive and/or regulatory factors affecting Phillips 66’s businesses generally as set forth in our filings with the Securities and Exchange Commission. Phillips 66 is under no obligation (and expressly disclaims any such obligation) to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.}

View source version on businesswire.com: https://www.businesswire.com/news/home/20241014530757/en/

Jeff Dietert (investors)

832-765-2297

jeff.dietert@p66.com

Owen Simpson (investors)

832-765-2297

owen.simpson@p66.com

Al Ortiz (media)

855-841-2368

al.s.ortiz@p66.com

Source: Phillips 66

FAQ

What is Phillips 66 (PSX) selling in Switzerland?

Phillips 66 is selling its 49% non-operated equity interest in Coop Mineraloel AG (CMA), which operates 324 retail sites and petrol stations across Switzerland.

How much will Phillips 66 (PSX) receive from the sale of its Swiss joint venture stake?

Phillips 66 will receive 1.06 billion Swiss francs (approximately $1.24 billion), including a 1 billion Swiss franc sales price and an assumed dividend of 60 million Swiss francs.

When is the Phillips 66 (PSX) Swiss joint venture sale expected to close?

The transaction is expected to close in the first quarter of 2025, subject to approval by the Swiss Competition Commission.

How does this sale align with Phillips 66's (PSX) strategic goals?

This sale marks progress towards Phillips 66's commitment of over $3 billion in divestitures and aligns with their strategy of evaluating and monetizing assets that no longer fit their long-term plans.