Phillips 66 PSX, the Houston, TX-based oil giant, has signed a definitive agreement to divest a 65% stake in its Germany and Austria retail marketing operations, including 843 JET-branded fuel stations, to a consortium owned by investment firms Energy Equation Partners and Stonepeak. The business is being transferred via Carrera Bidco Ltd., with Phillips 66 retaining a non-operating 35% interest through a newly formed joint venture, Carrera LP.
PSX to Unlock $1.6 Billion in Pre-Tax Proceeds
According to PSX, the transaction values the Germany and Austria retail marketing business at an enterprise value of approximately €2.5 billion ($2.8 billion), reflecting a 9.1x EV/EBITDA multiple based on expected 2025 earnings. Phillips 66 expects to receive about €1.5 billion ($1.6 billion) in pre-tax cash proceeds, which it plans to deploy toward its key priorities— reducing debt and returning value to shareholders.
Phillips 66 Chairman and CEO Mark Lashier described the transaction as a strategic move to optimize the company’s portfolio and enhance long-term shareholder value. He noted that the new joint venture allows the company to monetize a non-core asset while continuing to benefit from its future growth.
PSX to Continue Supplying Fuels From Karlsruhe Refinery
As part of the deal, Phillips 66 has committed to a multi-year supply agreement to provide transportation fuels to the divested business from the MiRO Refinery in Karlsruhe, Germany. MiRO, the country’s largest refinery, has a capacity of 15.8 million tons per year. Phillips 66 operates it through a joint venture and holds an 18.75% interest.
PSX Maintains Focus on Debt Reduction Amid Activist Pressure
The move comes amid growing pressure from activist investor Elliott Management and forms part of Phillips 66's broader strategic realignment. The company has already divested approximately $3.5 billion in assets since launching its portfolio optimization plan less than three years ago. On an April 25 analyst call, CFO Kevin Mitchell confirmed that PSX was ahead of its debt reduction targets and noted that divestiture talks were “very active.” CEO Lashier also hinted at the potential sale of non-core midstream assets.
The Germany-Austria transaction is expected to be closed in the second half of 2025, pending regulatory approvals and customary closing conditions.
PSX’s Zacks Rank & Key Picks
Currently, Phillips 66 carries a Zack Rank #3 (Hold).
Investors interested in the energy sector may look at some better-ranked stocks like Diversified Energy Company plc DEC, Comstock Resources, Inc. CRK and RPC Inc. RES, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Diversified Energy Company is an independent oil and natural gas producer in the United States. The company is primarily engaged in the production, transportation, and marketing of natural gas and natural gas liquids. The rising demand for natural gas as a cleaner-burning fuel and an uptick in the commodity’s prices are expected to positively impact DEC’s bottom line.
Comstock Resources is a leading independent natural gas producer with core operations in the Haynesville and Bossier shale formations of North Louisiana and East Texas. The company benefits from direct access to Gulf Coast markets and the LNG corridor. It maintains one of the industry’s lowest operating cost structures, and has significantly reduced its leverage. With over 1,600 high-return drilling locations offering more than 25 years of inventory, strong free cash flow supports Comstock’s growing financial strength.
RPC generates strong and stable revenues through a diverse range of oilfield services, including pressure pumping, coiled tubing and rental tools. The company is strongly committed to returning value to shareholders through consistent dividends and share buybacks. RPC’s current dividend yield is higher than that of the composite stocks belonging to the industry. Its new Tier IV dual-fuel fleet has boosted profits, with plans to further expand high-efficiency equipment to enhance operational capabilities.
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Comstock Resources, Inc. (CRK): Free Stock Analysis Report Diversified Energy Company PLC (DEC): Free Stock Analysis Report Phillips 66 (PSX): Free Stock Analysis Report RPC, Inc. (RES): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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