Marathon Petroleum Corp. (MPC) has agreed to buy rival Andeavor for $23.3 billion, creating the largest U.S. refiner by capacity.
The transaction was unanimously approved by the board of directors of both companies and is expected to close in the second half of 2018, subject to regulatory and other customary closing conditions, including approvals from both MPC and Andeavor shareholders.
"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. "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.
The headquarters will be located in Findlay, Ohio, and the combined business will maintain an office in San Antonio. At closing, Greg Goff, Andeavor chairman and chief executive officer, will join MPC as executive vice chairman. Goff, along with three other Andeavor directors, will also join the board of directors of Marathon Petroleum.
"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 Goff. "As the largest refiner by capacity in the U.S., with a best-in-class operating capability and a strong capital structure, the combined company will be exceptionally well-positioned to deliver on its synergy and earnings targets."
MPC is the nation's second-largest refiner, with a crude oil refining capacity of approximately 1.9 million barrels per calendar day in its six-refinery system. Marathon brand gasoline is sold through approximately 5,600 independently owned retail outlets across 20 states and the District of Columbia, but focused on the Midwest and the Gulf Coast. 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. Andeavor operates 10 refineries with a combined capacity of approximately 1.2 million barrels per day in the mid-continent and western United States.
According to Bloomberg calculation, the combination, which will use the name Marathon, would overtake Valero Energy Corp. as the biggest in U.S.-based oil refiner by capacity, generating about 16 percent of the nation’s total.
