Marathon to Buy Andeavor in $23.3 Billion Oil-Refining Deal

Author photo: Tim Shea
ByTim Shea
Category:
Acquisition or Partnership

Marathon Petroleum Corp. agreed to buy rival oil refiner Andeavor for $23.3 billion in a deal that would create the largest independent fuel maker in the U.S.  The offer, payable in either cash or shares, values Andeavor at about $152.27 a share, the companies said in a statement on Monday. That’s about a 24 percent premium over Friday’s closing price.

Marathon is focused in the Midwest and Gulf Coast, while Andeavor’s refineries and pipelines are in western states. They are among the biggest beneficiaries of the shale boom, with access to abundant supplies at a discount to global prices. The combination would overtake Valero Energy Corp. as the biggest in U.S.-based oil refining capacity, generating about 16 percent of the nation’s total, according to Bloomberg calculations.

The boards of both companies unanimously approved the deal, which is expected to close in the second half of this year, subject to regulatory and shareholder approvals.

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