Blog Exposure – Marathon Petroleum to Take Over Andeavor in a Mega Deal Valued at $35.6 Billion

LONDON, UK / ACCESSWIRE / May 2, 2018 / Active-Investors.com has just released a free research report on Marathon Petroleum Corp. (NYSE: MPC) (”Marathon”). If you want access to this report all you need to do is sign up now by clicking the following link www.active-investors.com/registration-sg/?symbol=MPC as the Company’s latest news hit the wire. On April 30, 2018, the Company announced that it has signed an agreement to acquire all outstanding shares of Andeavor (NYSE: ANDV). The cash plus stock deal has a total equity value of $23.3 billion and total enterprise value of $35.6 billion. The mega merger is expected to create one of the largest refining, marketing, and midstream Company in the US. Register today and get access to over 1,000 Free Research Reports by joining our site below:

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Active-Investors.com is focused on giving you timely information and the inside line on companies that matter to you. This morning, Marathon Petroleum and Andeavor most recent news is on our radar and our team decided to put out a fantastic report on the company that is now available for free below:

www.active-investors.com/registration-sg/?symbol=MPC

www.active-investors.com/registration-sg/?symbol=ANDV

Transaction Details

Marathon has offered to pay Andeavor’s shareholders $152.27 in cash, or 1.87 of Marathon’s shares for each Andeavor’s share they own. The option to choose cash consideration is subject to proration and a maximum of 15% of Andeavor’s shareholders can opt for this choice. The transaction would be tax free for those Andeavor’s shareholders opting to choose Marathon’s shares. Marathon’s offer is at a 24.4% premium of Andeavor’s share prices at the close of trading on April 27, 2018, the last day of trading before the deal was announced.

The transaction has been approved by the Board of Directors of both companies. The deal is expected to close in H2 2018 and is subject to regulatory and shareholders’ approval and other closing conditions.

Once the merger is completed, Marathon’s shareholders will own approximately 66% stake in the merged company and remaining 34% stake will be owned by Andeavor’s shareholders. The merged company will be headquartered in Findlay, Ohio and it will continue to maintain the office at San Antonio, Texas.

On completion of the merger, Greg Goff will join Marathon team as Executive Vice Chairman and provide leadership and strategy for the smooth integration of the two businesses. Greg Geoff plus three other directors from the Andeavor’s Board will become members of the Marathon’s Board once the deal is closed.

Quotes from Management

Commenting on the acquisition of Andeavor, Gary R. Heminger, Chairman and CEO of Marathon, said:

”Each of our operating segments are strengthened through this transaction, as it geographically diversifies our refining portfolio into attractive markets, increases access to advantaged feedstocks, enhances our midstream footprint in the Permian basin, and creates a nationwide retail and marketing portfolio that will substantially improve efficiencies and enhance our ability to serve customers.”

Greg Goff, Chairman and CEO of Andeavor, added:

”This strategic combination provides our shareholders with a premium for their shares and the opportunity to benefit from substantial future value creation at MPC. As the largest refiner by capacity in the US, 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.”

Benefits of the Deal

Marathon expects the deal to be highly accretive and result in tangible annual run-rate synergies of approximately $1 billion within the first three years of closing the transaction. The deal is expected to increase the cash flow generation on a long-term basis. Marathon’s Board is highly confident of the positive cash flows from the operations of the merged company, and it has announced share buyback program of $5 billion which would be done on an incremental basis. Marathon is also confident of maintaining its dividend payments and investment-grade credit profile even after completing the merger.

The deal is expected to expand the refining capacity and the merged company is expected to have a throughput capacity of over 3 million barrels per day. This makes the merged company the number one refiner in the US and one of the top five refiners globally based on its refining capacity. The merged company is also expected to have an initial enterprise value of over $90 billion.

The deal allows Marathon to expand its geographic footprint in California, the Mid-Continent, and the Pacific Northwest where Andeavor has refineries and would complement Marathon’s existing refining operations in Gulf Coast and Midwest.

The merger is expected to unlock substantial efficiencies which would lead to substantial savings. The merger is expected to create a national retail and marketing platform, including a nationwide loyalty program which allows for better customer interactions and contribute to the revenue generation.

Marathon already has significant presence in the Marcellus Shale and the merger will allow it to expand its presence in the Permian and Bakken regions where Andeavor has operations. This will allow Marathon to significantly increase its midstream growth opportunities. The deal will allow Marathon to own two master limited partnerships (MLPs) – MPLX L.P. (NYSE: MPLX) and Andeavor Logistics (NYSE: ANDX). The merger will allow Marathon to own the general partner of the two MLPs and it will be the largest unitholder in each of these MLPs.

About Andeavor

San Antonio, Texas-based Andeavor is a premier, highly integrated marketing, logistics and refining Company. The Company was formed with the acquisition of Western Refining by Tesoro in June 2017. The Company’s retail business includes over 3,100 retail fuel stations under the ARCO®, SUPERAMERICA®, Shell®, Exxon®, Mobil®, Tesoro®, USA Gasoline™, and Giant® brands. The Company operates 10 refineries in the Midwest and Western US which have a combined capacity of approximately 1.2 million barrels per day. The Company also has an extensive logistics network which includes pipeline, rail, marine, storage, and trucking operations. Andeavor has over 13,000 employees.

About Marathon Petroleum Corp.

Findlay, Ohio-based Marathon operates an integrated refining, marketing, and transportation system concentrated primarily in the Midwest, Northeast, East Coast, Southeast, and Gulf Coast regions of the US. The Company’s operations are divided into three verticals – Refining and Marketing, Midstream, and Speedway. It is the second-largest refiner in the US with refining capacity of approximately 1.9 million barrels per calendar day. The Company owns, leases, or has interest in approximately 10,800 miles of crude and light product pipelines. Speedway is the second largest chain of corporate-owned convenience stores in the US with over 2,740 convenience stores in 21 states. The Company has over 43,800 employees and its earnings for FY17 was $3.43 billion.

Stock Performance Snapshot

May 01, 2018 – At Tuesday’s closing bell, Marathon Petroleum’s stock fell 2.68%, ending the trading session at $72.90.

Volume traded for the day: 20.91 million shares, which was above the 3-month average volume of 4.43 million shares.

Stock performance in the last month – up 1.53%; previous three-month period – up 5.45%; past twelve-month period – up 43.33%; and year-to-date – up 10.49%

After yesterday’s close, Marathon Petroleum’s market cap was at $35.43 billion.

Price to Earnings (P/E) ratio was at 19.13.

The stock has a dividend yield of 2.52%.

The stock is part of the Basic Materials sector, categorized under the Oil & Gas Refining & Marketing industry.

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