Phillips 66 to sell 65% interest in Germany, Austria retail marketing business for $1.6 billion

A Phillips 66 subsidiary, Phillips 66 Continental Holding GmbH, has agreed to sell a 65% interest in its Germany and Austria retail marketing business, including JET-branded sites, to Carrera Bidco Ltd., whose shareholders are subsidiaries of investment Energy Equation Partners and Stonepeak. 

Phillips 66 will retain a non-operated 35% interest in the business through a newly formed joint venture (Carrera LP), the company detailed in a release and US Securities and Exchange filing May 15. 

The deal values the Germany and Austria retail marketing business at an enterprise value of about $2.8 billion, and Phillips 66 expects to receive pre-tax cash proceeds of about $1.6 billion after customary purchase price adjustments.

Phillips 66 chairman and chief executive officer Mark Lashier said the new joint venture will allow Phillips 66 “to monetize this non-core asset while retaining the ability to benefit from its future growth.”

In connection with the deal, Phillips 66 will enter into a multi-year agreement to supply a subsidiary of Carrera LP with transportation fuels from the 15.8-million tonnes/year Mineraloelraffinerie Oberrhein GmbH & Co. KG (MiRO) refinery in Karlsruhe, where crude oil is refined into products such as gasoline, diesel, heating oil, bitumen, and feedstocks for the chemical industry. Phillips 66 operates the refinery, Germany's largest, through a joint venture in which it holds a 18.75% interest. 

Debt-reduction plans

The move is not unexpected as the company has laid out debt reduction plans and has sold about $3.5 billion in assets as of first-quarter 2025 as part of a plan that began under 3 years ago.

The company has been under scrutiny from activist investor Elliot Management. Phillips 66 said it plans to use proceeds from the retail deal to "support the company's strategic priorities, including debt reduction and shareholder returns."  

In a call with analysts Apr. 25, Phillips 66 chief financial officer and executive vice-president Kevin Mitchell said the company was ahead of the debt-reduction target and noted the discussions about the divestment of the European retail assets were "very active." 

On the call, chief executive Lashier said the company was looking at other assets it defined as non-core for potential disposition. "Many of them are in the midstream, we're not going to name any specific assets. But certainly, we know what the value of those assets are, and we know that there are potential buyers out there," he said. 

The Germany-Austria retail deal is expected to close in second-half 2025, subject to regulatory approvals and other customary conditions.