FINDLAY, Ohio, and SAN ANTONIO -- Refiners and retailers Marathon Petroleum Corp. (MPC) and Andeavor have entered into a definitive merger agreement under which MPC will acquire all of Andeavor’s outstanding shares, representing a total equity value of $23.3 billion and a total enterprise value of $35.6 billion.
The deal geographically diversifies the companies’ refining portfolio into attractive markets. San Antonio-based Andeavor's refineries in California, the midcontinent and the Pacific Northwest complement Findlay, Ohio-based MPC's existing Gulf Coast and Midwest refining footprint. The combined company will be the No. 1 U.S. refiner by capacity and a top five refiner globally, with a throughput capacity of more than 3 million barrels per day.
The transaction creates a nationwide marketing portfolio, combining MPC's strength east of the Mississippi with Andeavor’s strong presence in the western United States. Combining the two businesses unlocks substantial efficiencies and creates a national retail and marketing platform, including a nationwide loyalty program that supports increased customer engagement and substantial revenue enhancement and cost saving opportunities.
The boards of both companies have unanimously approved the transaction, which they expect to close in the second half of 2018, subject to regulatory and other customary closing conditions, including approvals from both MPC and Andeavor shareholders.
The headquarters of the combined business will be in Findlay, Ohio, and it will maintain an office in San Antonio.
At closing, Greg Goff, Andeavor chairman and CEO, will join MPC as executive vice chairman. Along with three other Andeavor directors, Goff will also join the MPC board.
Andeavor is an integrated marketing, logistics and refining company that operates 10 refineries in the midcontinent and western United States. It also owns a midstream master limited partnership (MLP) with about 11,000 miles of crude oil and light-product pipelines. Its retail-marketing system includes more than 3,200 outlets with fuel brands such as ARCO, SuperAmerica, Shell, Exxon, Mobil, Tesoro, USA Gasoline and Giant.
Formerly Tesoro Corp., the company changed its name to Andeavor in August 2017 following its $6.4 billion acquisition of El Paso, Texas-based Western Refining Inc. in June 2017.
Marathon is the second largest U.S. refiner with six refineries. It also owns a midstream master limited partnership with about 10,800 miles of crude oil and light-product pipelines. Marathon-brand gasoline is sold through about 5,600 independently owned retail outlets across 20 states and the District of Columbia. In addition, Enon, Ohio-based Speedway LLC, an MPC subsidiary, owns and operates about 2,740 convenience stores in 21 states. Speedway ranked No. 3 in CSP's2017 Top 202 list of the largest c-store chains in the United States. The combined company will create an 8,800-store retail portfolio.
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