May 19, 2020

Marathon to acquire Andeavor in $23bn deal

Mergers & Acquisitions
Oil & Gas
Pouyan Broukhim
2 min
Marathon to acquire Andeavor in $23bn deal

Ohio-based Marathon Petroleum Corp has agreed to buy fellow US refining company Andeavor in a deal valued at $23bn, making Marathon the leading refiner in the US.

The transaction will see Marathon paying $152.27, or 1.87 Marathon shares, per Andeavor share, equating to a 24.4% premium compared to Andeavor’s unaffected stock price as of 27 April.

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“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 Heminger, Chairman and Chief Executive Officer of Marathon.

The acquisition comes at a time of strength in the US shale oil market with the country having become the world’s leading fuel exporter, trading more than 3mn barrels per day of petroleum.

The merger is expected to provide operational synergies including a geographically diversified portfolio, particularly within the Permian Basin - the largest oilfield in the US - that will enable Marathon to better serve its customers across a broader range of markets.

“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,” said Greg Goff, Andeavor’s Chairman and CEO.

“We look forward to working together to deliver on the full potential of this powerful combination.”

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