{"id":7884,"date":"2018-04-30T09:15:11","date_gmt":"2018-04-30T13:15:11","guid":{"rendered":"http:\/\/lifeinsurance-orleans.ca\/Life-Insurance-Blog\/?guid=3f4141cb9b01f2f944922b578b4fd52f"},"modified":"2018-04-30T09:15:11","modified_gmt":"2018-04-30T13:15:11","slug":"marathon-petroleum-to-buy-andeavor-for-23-billion-creating-new-top-u-s-refiner","status":"publish","type":"post","link":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/2018\/04\/30\/marathon-petroleum-to-buy-andeavor-for-23-billion-creating-new-top-u-s-refiner\/","title":{"rendered":"Marathon Petroleum to buy Andeavor for $23 billion, creating new top U.S. refiner"},"content":{"rendered":"<p>Marathon Petroleum Corp said on Monday it would buy rival Andeavor for more than US$23 billion, forming a company that will leapfrog Valero Energy Corp as the largest independent U.S. refiner by capacity.<\/p>\n<p>The cash-and-stock deal marries operations that are broadly complementary in terms of geography as well as giving Marathon extra capacity in the U.S. light crude produced by a booming shale oil sector.<\/p>\n<p>The deal values Andeavor, formerly known as Tesoro, at about US$152 per share, a premium of about 24 per cent to closing prices on Friday, driving shares in the San Antonio-based firm 14 per cent higher in premarket trading on Monday.<\/p>\n<p>Marathon shareholders were less upbeat, knocking 5 per cent off the company\u2019s stock price despite the board approving an additional US$5 billion share buyback.<\/p>\n<ul class=\"related_links\">\n<li><a href=\"http:\/\/business.financialpost.com\/commodities\/energy\/fire-injuries-at-wisconsin-refinery-adds-to-husky-energys-operational-woes\">Fire, injuries at Wisconsin refinery add to Husky Energy\u2019s operational woes<\/a><\/li>\n<li><a href=\"http:\/\/business.financialpost.com\/commodities\/energy\/north-west-refining-withdrawing-proposal-to-expand-sturgeon-refinery-for-now\">North West Refining withdrawing proposal to expand Sturgeon Refinery \u2013 for now<\/a><\/li>\n<li><a href=\"http:\/\/business.financialpost.com\/commodities\/energy\/junior-company-gen-iii-oil-investing-90-million-to-rebuild-idle-oil-refinery-in-alberta\">Junior company Gen III Oil investing $90 million to rebuild idle oil refinery in Alberta<\/a><\/li>\n<\/ul>\n<p>\u201cWe view this as pretty full value for Andeavor,\u201d analysts from Scotia Howard Weil said in a note. \u201cNot many saw this one coming.\u201d<\/p>\n<p>The proposed combination would be the largest in refining since Holly Oil acquired Frontier Corp in 2011, but analysts at Tudor Pickering Holt said they expected the location of the two companies\u2019 operations to allow them to avoid antitrust hurdles.<\/p>\n<p>\u201cDespite the size of Marathon-Andeavor, we do not foresee any regulatory problems,\u201d they wrote in a note on the deal.<\/p>\n<p>Shale oil fields have pushed U.S. crude production to record highs and industry experts argue operations that have capacity to refine light crude like Andeavor will be better positioned to take advantage of the boom.<\/p>\n<p>Andeavor also runs refineries in Alaska, California, Minnesota, New Mexico, North Dakota, Texas, Utah and Washington which should complement Marathon\u2019s largely eastern plants.<\/p>\n<p>Including Andeavor\u2019s debt, Marathon is paying US$35.6 billion to hold 66 per cent of a combined company worth some 58 billion at closing stock market prices on Friday.<\/p>\n<p>It will have the capacity to process about 3.1 million barrels per day along with a large network of filling stations and oil and natural gas pipelines.<\/p>\n<p>Marathon Chief Executive Gary Heminger, who oversaw a 20 per cent rise in net profit in the first quarter, will run the combined company, with a senior role for Andeavor\u2019s chief executive, Gregory Goff.<\/p>\n<p>\u201cEach of our operating segments are strengthened through this transaction,\u201d Heminger said in a statement.<\/p>\n<p>\u201cIt geographically diversifies our refining portfolio into attractive markets&#8230;&#8230;enhances our midstream footprint in the Permian basin, and creates a nationwide retail and marketing portfolio,\u201d he added.<\/p>\n<p>In a separate release on Monday, Marathon missed Wall Street forecasts for quarterly profit by a wide margin, as its expenses jumped 15 per cent on the back of a surge in refining driven by the boom in U.S. crude production.<\/p>\n<p>The Andeavor deal is expected to close in the second half of this year.<\/p>\n<p><em>\u00a9 Thomson Reuters 2018<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The new company will leapfrog Valero Energy as the largest independent U.S. refiner by capacity<\/p>\n","protected":false},"author":578,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[],"tags":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/7884"}],"collection":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/users\/578"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/comments?post=7884"}],"version-history":[{"count":0,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/7884\/revisions"}],"wp:attachment":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/media?parent=7884"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/categories?post=7884"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/tags?post=7884"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}