Mergers & Acquisitions

HollyFrontier to Acquire Sinclair Oil

Deal creates integrated downstream petroleum company supplying 1,600 stations, with plans to grow network
Photograph: Shutterstock

DALLAS — HollyFrontier Corp., in a transaction valued at $1.8 billion, and Holly Energy Partners LP, in a deal valued at approximately $758 million, have entered into definitive agreements under which they will acquire Sinclair Oil Corp. and Sinclair Transportation Co. from The Sinclair Cos.

Sinclair is a privately held, vertically integrated oil company that supplies fuel to more than 1,600 Sinclair-branded gas stations in 29 states. The Salt Lake City-based company exited direct-ownership of retail outlets in 2010.

HollyFrontier is an independent petroleum refiner and marketer that owns and operates refineries in Kansas, Oklahoma, New Mexico, and Utah and markets its refined products principally in the Southwest, the Rocky Mountains extending into the Pacific Northwest and in neighboring Plains states.

HollyFrontier Deal

Dallas-based HollyFrontier will acquire Sinclair’s branded marketing business and all commercial activities, which build on the iconic “dinosaur” brand, as well as two refineries in the Rocky Mountain region and its renewable diesel business.

“Sinclair also adds to HF Sinclair an outstanding and extremely successful brand marketing team,” said Ross Matthews, chairman and CEO of Sinclair. “The transaction will help accelerate the ongoing rapid expansion of our Sinclair-branded retail sites and the iconic Dino brand.”

As part of the transaction, announced earlier this month, HollyFrontier will form a new parent company, named HF Sinclair Corp., which will replace HollyFrontier as the public company trading on the New York Stock Exchange (NYSE).

The transaction will transform HollyFrontier by accelerating its growth while increasing scale and diversification, the company said. It also allows HollyFrontier to integrate downstream into branded wholesale distribution. HF Sinclair will drive incremental free cash flow growth through its expanded refining business, integrated distribution network, leading renewable diesel position and growing lubricants and specialties business.

Upon closing of the transaction, HollyFrontier’s existing senior management team will operate the combined company. The new company will have its headquarters in Dallas, with combined business offices in Salt Lake City.

“HollyFrontier was formed through a transformational merger that facilitated a decade of significant stockholder returns along with growth and diversification into lubricants and renewables. We believe these transactions with Sinclair represent a similar inflection point, marking the beginning of our next chapter as HF Sinclair,” said Mike Jennings, CEO of HollyFrontier and HEP. “With this accretive transaction, we are adding an integrated marketing business with an iconic brand while building on the strength of our expanded refining network, increasing our scale and accelerating the growth of our renewables business.”

HEP Deal

HEP, also based in Dallas, provides petroleum product and crude oil transportation, terminalling, storage and other services in in Texas, New Mexico, Washington, Idaho, Oklahoma, Utah, Nevada, Wyoming and Kansas.

HEP will acquire Sinclair’s integrated crude and refined products pipelines, terminal and storage assets and interests in three pipeline joint ventures.

Upon closing of the HEP transaction, HEP’s existing senior management team will continue to operate HEP. It will continue to operate under the name Holly Energy Partners LP.

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