Mergers & Acquisitions

Tesoro to Acquire Western Refining

Deal creates highly integrated, geographically diversified refining, marketing and logistics company

SAN ANTONIO and EL PASO, Texas -- Tesoro Corp. and Western Refining Inc. have announced a definitive agreement under which Tesoro will acquire Western Refining for $37.30 per share in a stock transaction valued at $4.1 billion based on Tesoro's closing stock price of $85.74 on Nov. 16, 2016.

This represents an enterprise value of $6.4 billion, including the assumption of approximately $1.7 billion of Western's net debt and the $605 million market value of non-controlling interest in Western Refining Logistics LP.

The boards of directors of both companies unanimously approved the transaction.

The acquisition creates a geographically diversified refining, marketing and logistics company. It adds Western's refineries in Texas, New Mexico and Minnesota to Tesoro's existing refineries in California, Washington, Alaska, Utah and North Dakota. The combined retail operations will include more than 3,000 gas stations operating under 12 retail and convenience-store brands.

The transaction is subject to customary closing conditions, including approval by the shareholders of both companies and the receipt of regulatory approval. The companies said they expect the transaction to close in the first half of 2017.

San Antonio-based Tesoro is an independent refiner and marketer of petroleum products. It operates seven refineries, with ownership in a logistics business, which includes an interest in Tesoro Logistics LP and ownership of its general partner. Tesoro's retail-marketing system includes more than 2,400 gas stations under the Arco, Shell, Exxon, Mobil, USA Gasoline, Rebel and Tesoro brands.

El Paso, Texas-based Western Refining is an independent refining and marketing company that operates three refineries. Its retail operations include gas stations and c-stores under the Giant, Howdy's and SuperAmerica brands. The company also owns the general partner and approximately 53% of the limited partnership interest of Western Refining Logistics LP.

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