- The Andeavor acquisition represents a bet on the US shale oil boom. Andeavor owns two refining plants located near the Permian Basin, the shale hotbed in West Texas and New Mexico that is pumping more and more oil.
- One of the other catalysts for the deal: a 2020 rule change that will prevent ships from burning dirty fuel oil. The switch should boost demand for cleaner fuels that US refiners are able to produce.
Andeavor to be acquired by Marathon Petroleum (MPC) in a $23.3 bln deal
The co's announced that they have entered into a definitive merger agreement under which MPC will acquire all of ANDV's outstanding shares, representing a total equity value of $23.3 billion and total enterprise value of $35.6 billion, based on MPC's April 27, 2018, closing price of $81.43. ANDV shareholders will have the option to choose 1.87 shares of MPC stock, or $152.27 in cash subject to a proration mechanism that will result in 15 percent of ANDV's fully diluted shares receiving cash consideration. This represents a premium of 24.4 percent to ANDV's closing price on April 27, 2018.
- MPC and ANDV shareholders will own approximately 66 percent and 34 percent of the combined company, respectively.
- Expected to be immediately accretive to earnings and cash flow per share
- Expect = $1 billion of tangible cost and operating synergies, driving substantial long-term earnings and cash flow per share accretion
- Continued commitment to MPC's 2018 capital return plans; MPC's board approved an incremental $5 billion of repurchase authorization
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