Marathon Petroleum and Andeavor Logistics have entered into a definitive merger agreement where Marathon will acquire Andeavor in a unit-for-unit transaction.
This agreement represents an equity value of $9 billion and an enterprise value of $14 billion for the acquired entity. The transaction has been unanimously approved by Marathon and Andeavor’s boards of directors. Subject to conditions, the transaction is expected to close in the second half of 2019.
The combination will enhance commercial opportunities building on Marathon’s strong footprint in the Marcellus and deepening the presence in the Permian. Marathon’s focus will continue to be providing services with stable. Fee-based cash flows, expanding export capabilities and leveraging existing assets for third-party business. Additionally, the broader footprint enhances the ability to combine commercial efforts and selectively deploy capital towards the highest return projects with strategic importance.
Gary R. Heminger, chairman and CEO, says: ‘The combined entity will have an expanded geographic footprint which we believe enhances our long-term growth opportunities and the sustainable cash flow profile of the business. We are confident about the midstream growth and value-creation opportunities that exist across this combined platform in the best basins in the US.’