American refiner and lubricant maker Phillips 66 announced it will relinquish a 65% stake in its fuel retail operations in Germany and Austria, part of a push to streamline operations and boost shareholder value, the company said in a press release last week.
The transaction is valued at about €2.5 billion (U.S.$2.8 billion) and involves the transfer of a controlling interest in Phillips 66 Continental Holding GmbH to a consortium backed by private equity firms Energy Capital Partners and Stonepeak. The deal will form a new joint venture overseeing roughly 870 retail sites, including 843 JET-branded stations, as well as associated logistics and operations.
Phillips 66 will keep a 35% non-operating stake and has agreed to supply fuel from its Mineraloelraffinerie Oberrhein refinery in Karlsruhe, Germany. The deal is expected to close in the second half of 2025, pending approval.
The company’s CEO Mark Lashier said in the press release that the divestment is aligned with the company’s strategy to simplify its asset portfolio, reduce debt and increase shareholder value. He added that the transaction positions the retail business for continued competitiveness under new ownership.
The announcement comes amid mounting pressure from activist investor Elliott Investment Management, which already has a $2.5 billion position in Phillips 66 – representing roughly 5.7% of the company. Elliott has criticized the company’s performance relative to its peers and is pushing for a boardroom shakeup. Elliott nominated four directors to the Phillips 66 board, ahead of a key shareholder vote scheduled for May 21. Proxy advisory firms ISS and Glass Lewis have endorsed Elliott’s nominees, citing concerns over governance, shareholder returns and the company’s combined CEO-chairman structure.
Among the fund’s demands are a potential spin-off of midstream assets and a reassessment of Phillips 66’s 50-50 joint venture with Chevron, which produces petrochemicals and operates globally. The joint venture remains a cornerstone of Phillips 66’s integrated business model.
The current board of Phillips 66 countered with a letter that “encouraged shareholders to scrutinize the facts of this situation.” The company slammed Elliott’s “expectation of director loyalty, its conflicting competitive interests, its misleading disclosures and its preference for theatrics over transparency, strong corporate governance and good-faith engagement with Phillips 66.”
Elliot Investment Management was also involved in the acquisition of refiners Citgo last year and in a campaign to get BP to shed Castrol.