Marathon to become top U.S. refiner with $23 billion Andeavor buy
Marathon to become top U.S. refiner with $23 billion Andeavor buy
Marathon Petroleum Corp agreed to buy rival Andeavor https://reut.rs/2JFgc58)
"This creates one coast-to-coast, border-to-border refining and marketing company that seems well balanced with a pretty broad footprint," said Garfield Miller, CEO of Aegis Energy Advisors.
Marathon`s six refineries are largely in the Midwest, with one locale in Texas City, Texas. The Midwest region has reduced its reliance on crude oil from the Gulf Coast in recent years, pulling more of its barrels from Canada and North Dakota. Now, it is producing more products than it needs and has looked to export markets for additional opportunity.
Analysts at Tudor Pickering Holt said they expected the location of the two companies` operations to allow them to avoid antitrust hurdles.
Combining the companies` logistics subsidiaries will not happen immediately, Marathon CEO Gary Heminger said on a conference call following the transaction. He referred to that combination as a "day two issue."
Andeavor is expanding a retail network of motor fuel stations in the Mexican states of Baja California and Sonora under its ARCO brand.
U.S. Gulf Coast refiners are becoming more integrated in the region`s energy industry, filling shortages created by underinvestment in refining across Latin America.
"There`s no question the new company has greater resource capability going forward into Mexico," Andeavor Chief Executive Gregory Goff said on a conference call with analysts.
The companies did not spell out Goff`s role, but the Andeavor executive said he would likely be involved in operations and technology. Shares traded at about $13 apiece when Goff took the helm at Andeavor in 2010 and have risen nearly ten-fold in the past eight years.
The deal is expected to close in the second half of this year.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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