San Antonio, Texas-based Tesoro Corp. (NYSE: TSO) said it agreed to acquire El Paso-based Western Refining Inc. (NYSE: WNR) at an implied price of $37.30 per Western share in a stock transaction, representing an equity value of $4.1 billion, and an enterprise value of $6.4 billion.

The deal, which has been unanimously approved by the boards of directors of both companies, will create a premier, highly integrated and geographically diversified refining, marketing and logistics company.

The transaction is expected to close in the first half of 2017 and is subject to customary closing conditions, including approval by the shareholders of both companies and regulatory approval.

Western operates refineries in El Paso, Gallup, New Mexico and St. Paul Park, Minnesota. The company’s retail operations includes retail service stations and convenience stores in Arizona, Colorado, Minnesota, New Mexico, Texas, and Wisconsin, operating primarily through the Giant, Howdy’s, and SuperAmerica brands. Western also owns the general partner and approximately 53% of the limited partnership interest of Western Refining Logistics LP (NYSE: WNRL).

Tesoro is an independent refiner and marketer of petroleum products. The company operates seven refineries in the western United States with a combined capacity of over 895,000 barrels per day and ownership in a logistics business, which includes an interest in Tesoro Logistics LP (NYSE: TLLP) and ownership of its general partner. Tesoro’s retail-marketing system includes over 2,400 retail stations under the ARCO, Shell, Exxon, Mobil, USA Gasoline, Rebel and Tesoro brands.

“The acquisition of Western further strengthens our integrated business model and extends our portfolio into attractive and growing markets,” said Greg Goff, chairman and CEO of Tesoro.

“This strategic combination provides our shareholders with the opportunity to participate in the tremendous future growth prospects and synergies of the combined company,” said Paul Foster, executive chairman of Western Refining.

Western shareholders can elect to receive 0.4350 shares of Tesoro for each share of Western stock they own, or $37.30 in cash per share of Western stock. Elections to receive cash will be subject to proration to the extent they exceed approximately 10.8 million shares (or approximately $404 million in the aggregate). Stock elections will not be subject to proration. The purchase price represents a premium of 22.3% to the closing price of Western’s stock on the day prior to announcement, and a 31.6% premium to the volume weighted average price over the last 30 trading days. The transaction is expected to be tax-free to Western’s shareholders who elect stock.

Goldman, Sachs & Co. is serving as exclusive financial advisor to Tesoro and certain of its affiliates are providing committed financing. Sullivan & Cromwell LLP is serving as Tesoro’s legal advisor for the transaction. Barclays is serving as exclusive financial advisor to Western and Davis Polk & Wardwell LLP is serving as its legal advisor.



Thank you for contacting ExitHub. We'll respond as soon as possible.


© 2018 ExitHub Inc. All Rights Reserved.

Log in with your credentials


Forgot your details?

Create Account