May 15 (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 streamlines its portfolio under pressure

from activist investor Elliott Investment Management.

The investor has been advocating for changes in Phillips

66's organizational structure, operations, and board, as well as

the sale of its midstream business.

Phillips 66 said it expects to receive $1.6 billion in

pre-tax cash proceeds, which it will use to reduce debt and

enhance shareholder returns.

The deal includes 970 fueling stations, 843 of which are

branded 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.