Tesoro Corp. and Western Refining, Inc. announced that they have signed a definitive agreement under which Tesoro will acquire Western Refining at an implied current price of USD37.30 per Western Refining share in a stock transaction, representing an equity value of USD4.1 billion based on Tesoro’s closing stock price of USD85.74 on November 16, 2016.
This represents an enterprise value of USD6.4 billion, including the assumption of approximately USD1.7 billion of Western’s net debt and the USD605 million market value of non-controlling interest in Western Refining Logistics, LP.
The acquisition creates 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 the receipt of regulatory approval.
“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. “As a leading integrated refining, marketing and logistics company, this transformative acquisition drives value through a combination of access to advantaged crude oil, a strong, multi-brand marketing and convenience store portfolio and a robust platform for logistics growth, all of which will allow us to continue to create shareholder value.”
“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. “Joining forces with Tesoro, a company that shares our integrated business model strategy, will enable us to further leverage our capabilities in refining, marketing and logistics operations and allow our talented team to work on a growing number of exciting opportunities.”
Upon closing, Greg Goff will continue to serve as chairman, president and chief executive officer of the combined company. Steven Sterin will continue to serve as executive vice president and chief financial officer. Tesoro’s board of directors is also expected to expand the size of the board and name Western’s current executive chairman, Paul Foster, and Western’s current chief executive officer, Jeff Stevens, as directors after closing of the transaction.
The headquarters of Tesoro will remain in San Antonio, Texas, U.S.A.