=Andeavor (ANDV) to be acquired by Marathon Petroleum (MPC) for $23.3 bln

Marathon Petroleum (MPC) reached a $23 billion deal on Monday to scoop up rival Andeavor (ANDV), creating the largest oil refinery in the United States.

• 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

-=Andeavor (ANDV) : Q4 update

Andeavor provides Q4 update and tax reform impact on longer term estimates 

• Co expects to report fourth quarter net earnings of ~$5.55 to $5.65 per diluted share (may not compare to $1.24 consensus). Q4 results include ~$920 mln of benefit related to re- measurement of net deferred tax liabilities due to the recently enacted Federal Tax Cuts and Jobs Act. Furthermore, Andeavor estimates that compared to the 2018-2020 outlook provided at the Investor and Analyst Day on December 5, 2017, Federal tax-reform legislation will result in additional cumulative cash flow from operations of ~$1.0 to $1.5 bln through 2020.
• Expect fuel margins in Marketing segment of ~13 cents per gallon during the quarter. Segment operating income and segment EBITDA are expected to be ~$235 to $240 mln and $255 to $260 mln, respectively.
• Logistics segment operating income and segment EBITDA are expected to be ~$190 to $195 mln and $265 to $270 mln, respectively. These results include ~$10 mln of transaction costs related to the merger between Andeavor Logistics (ANDX) and Western Refining Logistics (WNRL) and the IDR Buy-In. Refining segment operating loss is expected to be $50 to $55 mln and segment EBITDA is expected to be ~$120 to $125 mln. Refining throughput was at the high end of guidance; however, this was partially offset by product yields and maintenance costs due to unplanned conversion unit downtime resulting in an approximately $25 million negative impact in the fourth quarter.
• These preliminary results also include Western Refining integration charges of ~ $25 mln which is consistent with previous guidance related to corporate expense. The Company also expects to report the following items not previously included in its fourth quarter guidance: ~$80 mln of costs related to Andeavor Logistics' inaugural investment grade offerings to refinance existing debt and $40 mln of asset impairment charges related to the Vancouver Energy project primarily as a result of the state of Washington's Energy Facility Site Evaluation Council's decision not to support development of the project.

=Tesoro (TSO) changing its name to Andeavor (ANDV)

    

Tesoro Corp. (NYSE: TSO) announces that it will be changing its name to Andeavor Corp. (NYSE: ANDV) following its acquisition of Western Refining.

• San Antonio, Texas -based refining company
• http://www.andeavor.com