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

• April 30 2018
• Dan Murtaugh

Marathon Petroleum Corp. agreed to buy rival oil refiner Andeavor for $23.3 billion, in a deal that could create the largest independent fuel maker in the U.S.

Marathon Petroleum Corp. agreed to buy rival oil refiner Andeavor for $23.3 billion, in a deal that could 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. The Wall Street Journal first reported the acquisition on Sunday.

Marathon’s geographic footprint is focused in the U.S. Midwest and Gulf Coast, while Andeavor’s refineries and pipelines are in western states. They are among the biggest beneficiaries of the shale boom, as the rapid growth in oil production has given them access to abundant supplies at a discount to global prices. Independent operators also reaped fatter profits from the recent overhaul of the U.S. tax code, and the Standard & Poor’s 500 Index of oil refiners reached an all-time high last week.

Findlay, Ohio-based Marathon Petroleum is the third-largest U.S. refiner by market capitalization, valued at about $38.6 billion, according to data compiled by Bloomberg. San Antonio, Texas-based Andeavor, formerly known as Tesoro Corp., is the fourth-largest, worth $18.7 billion. Phillips 66 is the largest U.S. independent refiner, valued at $51.9 billion.

Marathon Chief Executive Officer Gary Heminger is expected to run the combined company, while his counterpart at Andeavor, Gregory Goff will become executive vice chairman.

Marathon’s refineries can process 1.88 million barrels of oil a day, according to the company’s website. Andeavor’s plants would add about 1.2 million barrels a day of capacity, according to its website. Together they would account for about 17 percent of the U.S. total, according to Energy Information Administration data.