Marathon Petroleum bets big on refining growth
The strategic rationale behind the refiner's deal to takeover Andeavor appears solid, but is the timing right?
Marathon Petroleum has agreed to take over rival Andeavor for $23.3bn, in a blockbuster deal that will create America's largest refiner, with a network of pipelines, terminals and refineries spanning the country. The proposed acquisition—the largest refinery deal in US history—values Andeavor at $152.27 a share, a 24.4% premium on its share price just prior to the announcement. The purchase means Marathon will have access to 3.03m barrels a day of refining capacity, nearly twice that of ExxonMobil. It will replace Valero as the US's largest refiner. Geographically, the companies are a neat fit. Marathon's base is currently in the Midwest and Gulf Coast regions, while Andeavor has major faci
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