ARKO to Spin Off Fuel Arm in IPO, Forging Two Distinct Public Giants

RICHMOND, VA – December 19, 2025 – ARKO Corp., a Fortune 500 powerhouse in the U.S. convenience store and fuel wholesale market, today announced a significant strategic pivot, filing for a proposed initial public offering (IPO) of its subsidiary, ARKO Petroleum Corp. (APC). The move, detailed in a Form S-1 registration statement filed with the Securities and Exchange Commission, aims to carve out the company's extensive fuel distribution and logistics operations into a new, separately traded public entity.

This separation would effectively create two distinct companies from the current ARKO empire: one focused on the high-volume, logistics-driven world of wholesale fuel, and the other dedicated to the consumer-facing retail convenience store market. The proposed offering, to be managed by a syndicate of top investment banks including UBS Investment Bank, Raymond James, and Stifel, signals a deliberate effort by ARKO to refine its structure and unlock what it believes is unrealized value within its complex business model.

A Strategic Split to Unlock Value

The decision to spin off ARKO Petroleum Corp. is a classic corporate strategy designed to create more focused, or "pure-play," companies. By separating its wholesale and retail arms, ARKO's leadership is betting that the market will assign a higher combined valuation to two specialized entities than to one diversified conglomerate. Investors often apply a "conglomerate discount" to companies with disparate operations, making it difficult to accurately value each segment's performance and prospects.

This IPO aims to solve that problem. It will allow investors to choose between the stable, fee-based cash flows of a large-scale fuel distributor and the dynamic, consumer-driven growth potential of a major convenience store chain. The strategic rationale extends to capital allocation. According to the S-1 filing, a primary use of the IPO proceeds will be to repay borrowings under a major credit facility, immediately strengthening APC's balance sheet and providing it with greater financial flexibility for its own growth initiatives.

For the parent company, this move sharpens its narrative. ARKO Corp. has grown aggressively through acquisitions, accumulating a vast network of stores and a significant debt load. Creating a separate, publicly-funded entity for the capital-intensive fuel business could allow the parent to concentrate its resources and management attention on its core retail operations, potentially accelerating its own growth and improving profitability in that competitive sector.

Introducing ARKO Petroleum Corp.

If the IPO is successful, ARKO Petroleum Corp. will emerge as a formidable new player in the energy logistics space. Its business is built not on speculative oil price bets, but on long-term, fee-based contracts that provide a steady revenue stream. APC's operations, as outlined in the filing, are vast. As of the end of the third quarter of 2025, its network included supplying fuel to 2,053 third-party dealer sites and 1,158 of its parent company's retail locations, alongside operating 288 cardlock sites for fleet fueling.

In 2024 alone, the businesses that will constitute APC distributed 2.1 billion gallons of fuel, generating revenues of $6.37 billion. While revenue was down from the prior year, the business still produced a net income of $40.2 million. For the first nine months of 2025, net income was reported at $24.7 million. This financial foundation, combined with its extensive geographic footprint across more than 30 states and supply relationships with major refiners like Shell, ExxonMobil, and BP, positions APC as a critical component of the nation's fuel infrastructure.

Leadership continuity appears to be a priority. The new entity will be led by seasoned ARKO executives, with ARKO Corp. CEO Arie Kotler serving as President and CEO of APC. He will be joined by Jordan Mann as Chief Financial Officer and Maury Bricks as General Counsel, ensuring that the new company is helmed by a team intimately familiar with its operations and strategic objectives.

Navigating Market Headwinds and Governance Concerns

ARKO Petroleum Corp. is preparing to enter a public market that is showing renewed signs of life. After a sluggish 2024 for energy IPOs, a modest rebound in investor appetite has emerged in 2025, driven by higher commodity prices and a wave of M&A activity that has reduced the number of available public energy investments. This creates a potentially favorable window for a new, large-scale listing like APC.

However, potential investors will have to weigh the opportunity against significant governance considerations. The S-1 filing makes it clear that post-IPO, ARKO Corp. will retain a controlling interest in APC, classifying it as a "controlled company" under Nasdaq rules. This status exempts APC from certain corporate governance requirements, such as having a majority of independent directors. ARKO Parent will have the power to determine the outcome of all matters requiring stockholder approval, including the election of directors and major corporate transactions.

While the filing states that a Conflicts Committee will be established to review potential issues, the inherent power imbalance could be a point of concern for minority shareholders. The relationship between the two companies will be governed by a complex series of agreements, including a crucial Fuel Distribution Agreement that locks in ARKO's retail sites as a long-term customer for APC, providing baseline revenue stability but also underscoring the deep, ongoing entanglement between the parent and its newly public subsidiary.

Refueling the Future of Convenience Retail

Beyond the creation of a new fuel logistics giant, the IPO has profound implications for the future of ARKO's remaining retail business. Freed from the operational and capital demands of the wholesale fuel segment, the parent company can intensify its focus on transforming its vast network of convenience stores. The modern convenience retail landscape is evolving rapidly, with success increasingly dependent on factors beyond the fuel pump.

This strategic shift allows ARKO to double down on high-margin growth areas like prepared foods, private-label merchandise, loyalty programs, and the overall in-store customer experience. With a stable fuel supply guaranteed through its agreement with APC, the retail-focused company can invest more aggressively in store remodels, technology upgrades, and new product offerings designed to compete with quick-serve restaurants and grocery stores.

Ultimately, the IPO sets ARKO Corp. on a dual track. It is launching ARKO Petroleum Corp. as a focused, large-scale player in energy distribution, engineered for stability and efficiency. Simultaneously, it is repositioning its legacy retail business to be more agile and innovative, ready to capitalize on the changing tastes of the American consumer. The success of this strategy will depend on how well each company executes its newly defined mission.