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Marathon completes acquisition of rival Andeavor

 

FINDLAY — Marathon Petroleum Corp. said its $23.3 billion five-month effort to acquire Texas-based rival Andeavor is complete, making the Findlay-based refining and marketing company the largest U.S. oil refiner by capacity.

The deal was completed Monday, a week after shareholders of both firms agreed to the transaction. Marathon said shares of San Antonio-based Andeavor ceased trading on the New York Stock Exchange and as a wholly-owned subsidiary of Marathon the Texas company will begin trading under the ticker symbol ANDX.

“This transformative transaction is a significant milestone in our company’s more than 130-year history,” Marathon Chairman and CEO Gary Heminger said in a statement. Marathon “is now the leading refining, midstream, and marketing company in the U.S., and is well-positioned for long-term growth and shareholder value creation.”

Marathon, which had been the nation’s second-largest refiner of crude oil with six refineries processing 1.9 million barrels of crude per day, acquired Andeavor’s 10 refineries spread across the western United States.

The combined 16 refineries give Marathon a refining potential of 3 million barrels per day. But Marathon also obtains 3,200 convenience stores and 13,000 employees in the West operating under the Arco brand plus seven other brands. Marathon already has 2,740 Speedway convenience stores.

The completion of the deal gives Andeavor stockholders either 1.87 shares of Marathon stock or $152.27 in cash for each Andeavor share. Marathon said based on current figures, the company will pay out about $3.5 billion in cash, and issue 240 million shares of Marathon common stock.

As a result, Marathon shareholders earlier agreed to expand the total number of shares the company can issue to two billion from one billion. The company has 451 million shares outstanding.

Marathon said in a Securities and Exchange Commission filing that it is assuming Andeavor’s $3.375 billion in debt because of the acquisition. The oil refiner added that it has entered into a $6 billion credit agreement, replacing a former $2.5 billion agreement.

As of Monday, former Andeavor Chairman and CEO Greg Goff has become executive vice chairman of Marathon with an annual base salary of $1.6 million and an annual bonus of $2.56 million if performance goals are met. He also could receive stock awards valued at $12.2 million under a long-term incentive plan.

Marathon has expanded its corporate board to 12 directors from a previous 10 and will give Mr. Goff and former Andeavor general counsel Kim Rucker board seats.

 

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