Marathon Petroleum will buy peer Andeavor in a cash and stock deal worth $23 billion, creating the biggest independent refiner in the United States, overtaking Valero. The new company will have a refining capacity of some 3.1 million barrels of crude daily.
The deal, which includes the assumption of more than $12 billion in debt, will give Marathon Petroleum a 66% stake in the new company and a better position to take advantage of the booming shale oil production in the country.
Andeavor’s refineries are scattered across the States and equipped to process exactly the type of light sweet crude that is pumped from the shale patch, unlike most Gulf Coast refineries that require imported heavy crude. This makes Andeavor better positioned than the Gulf Coast refineries to take advantage of the shale boom.
The deal values Andeavor’s stock at $152 per share, a premium of 24% to its closing price this Monday. The company operates refineries in Alaska, Utah, California, North Dakota, New Mexico, Texas, and Washington, while Marathon’s refining assets are in the Midwest and the Gulf Coast.
Deals, Mergers & Acquisitions
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