Marathon Petroleum Corp. agreed to buy rival oil refiner and fuel retailer Andeavor for $23.3 billion in a deal that would produce the largest independent fuel maker in the North America.
Marathon is focused in the Midwest and Gulf Coast, while Andeavor’s refineries and pipelines are in western states. The combination of both would overtake Valero Energy Corp. as the biggest U.S.-based oil refiner with a throughput capacity of more than 3 million barrels per day., according to Bloomberg.
"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 R. Heminger, MPC chairman and chief executive officer.
Andeavor shareholders will have the option to choose 1.87 shares of MPC stock, or $152.27 in cash for each share, according to the companies. MPC and ANDV shareholders will own approximately 66% and 34% of the combined company, respectively.
"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,” added Heminger.
Marathon brand gasoline is sold through approximately 5,600 independently owned retail outlets across 20 states and the District of Columbia. In addition, Speedway, an MPC subsidiary, owns and operates the nation's second-largest convenience store chain, with approximately 2,740 convenience stores in 21 states.
On the other hand, Andeavor's retail-marketing system includes more than 3,200 stores marketed under multiple well-known fuel brands, including ARCO, SUPERAMERICA, Shell, Exxon, Mobil, Tesoro, USA Gasoline and Giant.
"With significantly increased scale, a strong platform for our midstream businesses and a leading nationwide retail and marketing distribution portfolio, the combined company presents tremendous value enhancement and growth opportunities for all shareholders," said Gregg Goff, Andeavor’s CEO.
The headquarters will be located in Findlay, Ohio, and the combined business will maintain an office in San Antonio, Texas.
