Game Changer?

Pilot Flying J announced that Western Petroleum LLC (formally Western Petroleum, Inc.) has agreed to be acquired by Pilot Flying J.

For the few who may not be familiar with Pilot Flying J, the company is headquartered in Knoxville, Tennessee, and is one of the nation’s largest wholesale fuel providers; delivering over 500 million gallons of fuel to thousands of customers in 47 states and eight Canadian provinces. They operate over 550 retail locations across North America and the company is the largest operator of travel centers and travel plazas in North America.

Clearly Pilot Flying J is a Big Kahuna in the fuels business. In addition to fuels, they are a significant player in the retail lubricants business. The company has a private label lubricant brand and added to its market muscle in lubricants last year when they signed an agreement with ConocoPhillips to offer Kendall brand lubricants at its 550 Pilot Flying J truck stops and travel centers.

Now fold in the business of Western Petroleum; another leading marketer of transportation fuels. They sell approximately 200 million gallons of fuel a year. In addition, as a leading marketer for Chevron and ConocoPhillips lubricants, they too are a significant player in the lubricants business.

It will be interesting to see how this acquisition plays out.

Some say it’s all about fuels and the lubricants business of both companies will likely be back seated, or maybe even spun out of the mix in an effort to focus on the core business of fuels. Others, however, say this could be a game changer. One where a company with expertise and excellence in the transport business raises the bar on how the lubricant distribution business is run and how the majors interact with the big boys in the fuel and lubricant distribution business; a big business the majors helped create.