Delek US Holdings has acquired the outstanding shares of Alon’s common stock for $464 million.
The combined company will cover the refining, logistics, retail, wholesale marketing, renewables and asphalt markets. The refining system will have approximately 300,000 barrels per day of crude throughput capacity consisting of four locations and an integrated retail platform that includes locations serving central and west Texas and New Mexico.
Delek Logistics will also benefit from future drop downs and organic projects to support a larger refining system. This combination will create a larger marketing operation with 600,000 barrels per month of space on the Colonial Pipeline System.
Additionally, the combined company will have a larger presence in the Permian Basin. Its refining system will have access to 207,000 barrels per day of Permian sourced crude, which works out at 69% of the crude slate.
The system will have access to crude oil pipelines, tucking and gathering operations in the area in addition to Delek Logistics’ RIO join venture crude oil pipeline in west Texas.
Uzi Yemin, chairman, president and CEO of Delek, says: ‘We expect to be able to achieve meaningful synergies across the organisation and the combination will create a refining system that will be one of the largest buyers of crude from the Permian Basin among the independent refiners.
‘Additionally, we expect the combined company will have the ability to unlock logistics value from Alon’s assets through future potential drop downs to Delek Logistics Partners and create a platform for future logistics projects to support a larger refining system.’