Ohio-based Marathon Petroleum (NYSE:MPC) announced Monday that they would be entering into a merger agreement with the Texas-based oil company Andeavor (NYSE:ANDV).
Marathon will be purchasing Andeavor for approximately USD $23.3 billion.
The merger was approved unanimously by the Boards of both companies and is expected to be completed sometime during the second half of 2018.
According to Gary R. Heminger, Marathon’s chairman, and CEO, this transaction will “[combine] 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.”
>>>Weatherford Sells US Fracking Business to Schlumberger
Heminger adds that the merger between the two companies “geographically diversifies [Marathon’s] refining portfolio into attractive markets, increases access to advantaged feedstocks, enhances [their] midstream footprint in the Permian basin, and creates a nationwide retail and marketing portfolio that will substantially improve efficiencies and enhance [their] ability to serve customers.”
Marathon predicts that the merger will be able to generate over $5 billion in cash over the first five years.
Andeavor CEO and chairman, Greg Goff has said that the merger “presents tremendous value enhancement and growth opportunities for all shareholders.”
Goff will also be joining Marathon as its executive vice chairman and its Board of Directors, along with three other Andeavor directors.
>>>E.ON and RWE Sign Deal Which Will Transform German Energy Landscape
Both of the American oil and gas companies have stated that they are committed to safety, environmental stewardship, and community involvement.
The new company will be headquartered in Ohio, but will still have an office located in Texas.
Shares of Andeavor have gone up over 10% since the announcement. Compared to the company’s $122.38 closing value on Friday, today’s share value looks as if it will stay just under $140.00.
Shares of Marathon have gone down 7% and to approximately $75.00.
Featured Image: Twitter
