The U.S. based oil & gas industry major Marathon Petroleum Corp has recently announced that it has planned to buy the refining and pipeline company Andeavor in a deal valued at over USD 20 billion. The stock and cash deal has valued Andeavor at about USD 150 a share and is likely to be announced on April 30, citing sources.
Elaborating further on the transaction details, reports reveal that the offer represents a 22.6 percent premium to Andeavor’s stock closing price on April 27.
For the record, Marathon Petroleum Corp, which is based in Findlay, is the top second largest refiner in the U.S. oil & gas industry. The company’s Speedway unit owns the nation’s second-largest convenience-store chain and the gasoline under its brand name is sold in over 20 states. Not just that, Marathon is also the proud owner of a midstream master limited collaboration with over 11,000 miles of crude oil and light weight product pipelines.
It has been reported that Gary Heminger, Chief Executive Officer, Marathon is most probable to run the combined venture with a senior role for Gregory Goff, Andeavor’s chief executive.
According to authentic reports, the San Antonio based company Andeavor operates 10 refineries in the western U.S. with a total capacity of over 1.2 million barrels per day. Industry experts deem that with Andeavor operating in the West and Marathon in the East, the deal is certain to play a center role in expanding the companies’ complementary footprints in the oil & gas industry. They further speculate that the regulatory approval could be now easier to win with Marathon’s expansion.
As per analysts, with the gradual recovery of crude oil prices, the utilities and energy merger activity has witnessed a significant surge in the recent years.
Sources familiar with the matter anticipated the current acquisition deal to produce USD 1 billion worth of synergies.