Marathon Petroleum to buy Andeavor

10 May 2018

In what will create the largest independent fuel maker in the U.S., Marathon Petroleum Corp. will be buying Andeavor for $23.3 billion. Payable in either cash or shares, the offer values Andeavor at approximately $152.27 a share, according to the companies' statement. This represents a 24 percent premium over Friday's closing price. With Marathon shares having sunk as much as 8.9 percent in early trading, analysts at RBC Capital Markets consider the deal to be conducted at "peak refinding bullishness", while Andeavor rose as much as 18 percent.

Instrumental in providing American refiners with a "leg up" against foreign competitors has been a growing fuel demand in the U.S. and Latin America, as well as a shale boom that's expanded access to a relatively inexpensive domestic supply. Said Greg Goff, Andeavor's CEO: "The time is right now, because for this industry, the wind is behind our backs." The combination of the two companies, which will use the name Marathon, will overtake Valero Energy Corp. as the biggest U.S.-based oil refiner by capacity.