Michael Hennigan replaces company veteran Gary Heminger as Marathon Petroleum Corporation CEO, effective immediately. Heminger’s departure was announced in October as part of a sweeping restructuring that included a strategic review of the midstream business MPLX LP and the spinoff of its Speedway retail operation.
Hennigan, who is the former Midstream Boss, said the company will retain the Midstream Division unit despite demands from shareholder Elliott Management to separate it. Billionaire Paul Singer’s Elliott had last year renewed its demand for Marathon to split its business into three separate companies, saying that would boost shareholder value by as much as $40 billion.
But Marathon said separating the unit would have been cash-flow negative to it and would have taken up about $11 billion to $15 billion of resources “that could instead be returned to shareholders”.
Analysts at Credit Suisse said Hennigan’s appointment could have been the influential factor that made Marathon decide against a ‘transaction-oriented’ conclusion to the review. They added that the decision was the best outcome for MPLX as other alternatives would have been “dilutive” to its shareholders.
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