Phillips 66 announced late Monday that it has agreed to sell its 49% stake in Coop Mineraloel to its Swiss joint venture partner for approximately $1.24 billion, as part of the petroleum refiner's ongoing divestiture efforts. This transaction marks a key move in Phillips 66’s strategy to streamline its operations and refocus its portfolio.
The subsidiary, Phillips 66 Ltd., will transfer its non-operated equity interest in Coop Mineraloel for about $1.17 billion in cash, along with an additional $70 million designated as an assumed dividend for the current year, which is to be paid at or before the completion of the deal. Following the announcement, Phillips 66 shares saw a decline of 1.3% in Tuesday’s premarket activity. Coop Mineraloel operates a substantial network, overseeing 324 retail sites and petrol stations throughout Switzerland.
The completion of this transaction is pending approval from the Swiss Competition Commission and is anticipated to conclude in the first quarter of 2025. The energy giant is eyeing the proceeds from this sale to bolster its strategic priorities, which notably include returning value to shareholders. In a statement, Phillips 66 Chief Executive Mark Lashier emphasized the significance of this transaction, indicating that it aligns with the company’s goal of exceeding $3 billion in divestitures.
This is a continued effort to optimize their asset management as they streamline their business operations to align with long-term strategic goals. Lashier highlighted, "As we manage our portfolio, we will continue to evaluate monetization of assets that no longer fit our long-term strategy." Previous discussions in January revealed that Lashier expressed during a conference that the company was engaged in active negotiations for selling its noncore assets, a necessary step towards simplifying its business structure and adhering closely to a clear strategic trajectory.
These comments were precipitated by activist investor Elliott Investment Management's recent disclosures regarding a significant investment in Phillips 66, as they advocated for the company to monetize approximately $3 billion of its noncore assets. Earlier this year, in June, Phillips 66 executed the sale of its 25% non-operated common equity interest in the Rockies Express Pipeline to a subsidiary of Tallgrass Energy, realizing about $1.28 billion from that transaction, which resulted in pre-tax cash proceeds of $685 million. In another development, just a month prior, in May, Phillips 66 finalized a $550 million agreement to acquire Pinnacle Midland Parent from the private equity firm Energy Spectrum Capital with the aim to expand its natural gas gathering and processing capabilities in the Midland Basin. Current stock price stands at 133.02, reflecting a change of -2.40 or a percent change of -1.77.
Further developments are expected as Phillips 66 continues with its divestiture plans and focuses on enhancing shareholder returns..