(Reuters) -Phillips 66 said on Thursday it will sell a 65% stake in its German and Austrian fuel retail business to a private equity-led consortium, valuing the unit at $2.8 billion, as the U.S. refiner moves to streamline its portfolio amid pressure from activist investor Elliott Investment Management.
Elliott, which holds a $2.5 billion stake in Phillips 66, has been pushing for major changes at the company, including the potential spin-off or sale of its midstream business, and is seeking to refresh the board to align with its strategic goals.
Elliott did not immediately respond to a request on the divestment announcement.
Proxy advisory firms Institutional Shareholder Services (ISS) and Glass Lewis recently recommended shareholders support Elliott’s board nominees ahead of Phillips 66’s annual general meeting on May 21, indicating growing support for Elliott’s campaign.
Phillips 66 expects to receive about $1.6 billion in pre-tax cash from the sale, which it plans to use for debt reduction and boost shareholder returns, a move that could help gain support from its investors ahead of the AGM.
Shares of the company were down 0.8% in morning trade.
The deal with a consortium led by Energy Equation Partners and Stonepeak, and includes 970 fueling stations, with 843 branded as JET, and is expected to close in the second half of 2025.
The Houston-based company will retain a 35% non-operating interest in the business through a newly formed joint venture.
As a part of the deal, Phillips 66 will continue supplying the business with fuel products from its MiRO refinery in Karlsruhe, Germany, under a multi-year contract.
The refinery produces transportation fuels, petrochemical feedstocks, and home heating oil, among other products.
(Reporting by Tanay Dhumal in Bengaluru; Editing by Tasim Zahid)
