Marathon Petroleum Corp. (MPC) is to become the top U.S. refiner after a $23.3bn merger deal with Andeavor (ANDV) has been struck. MPC will acquire all of ANDV’s outstanding shares, representing a total equity value of $23.3bn and total enterprise value of $35.6bn, based on MPC’s April 27, 2018, closing price of $81.43.

The merger geographically diversifies the company’s refining portfolio into attractive markets and increases access to advantaged feedstocks: Andeavor’s refineries in California, the Mid-Continent and the Pacific Northwest complement MPC’s existing Gulf Coast and Midwest refining footprint. The combined company will be the Number one U.S. refiner by capacity and a top-five refiner globally, with throughput capacity of over 3 million barrels per day. The combination also enhances crude oil integration from wellhead to refinery supply across the integrated system.

MPC and ANDV shareholders will own approximately 66 percent and 34 percent of the combined company, respectively. The transaction was unanimously approved by the board of directors of both companies and is expected to close in the second half of 2018, subject to regulatory and other customary closing conditions, including approvals from both MPC and ANDV shareholders.  The headquarters will be located in Findlay, Ohio, and the combined business will maintain an office in San Antonio, Texas.

“This transaction combines two strong, complementary companies to create a leading U.S. refining, marketing, and midstream company, building a platform that is well-positioned for long-term growth and shareholder value creation,” said Gary Heminger, MPC Chairman and Chief Executive Officer.

“Each of our operating segments are strengthened through this transaction, as it geographically diversifies our refining portfolio into attractive markets, increases access to advantaged feedstocks, enhances our midstream footprint in the Permian basin, and creates a nationwide retail and marketing portfolio that will substantially improve efficiencies and enhance our ability to serve customers.

At closing, Greg Goff, ANDV Chairman and Chief Executive Officer, will join MPC as Executive Vice Chairman.

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30th April 2018

30th April 2018