(Reuters) – Marathon Petroleum Corp said on Monday it would buy rival Andeavor for more than $23 billion to form a company that would leapfrog Valero Energy Corp as the largest U.S. refiner by capacity.
The cash-and-stock deal values Andeavor at about $152 per share, representing a premium of about 24 percent to Andeavor stock’s Friday close.
The combined company will have the ability to process about 3.1 million barrels per day and have a large network of retail stations, oil, natural gas and refined products pipelines.
The deal is expected to produce $1 billion of synergies, Marathon said.
Marathon Chief Executive Gary Heminger will run the combined company, with a senior role for Andeavor’s chief executive, Gregory Goff.
San Antonio, Texas-based Andeavor, formerly known as Tesoro, operates 10 refineries in the western United States with a refining capacity of about 1.2 million barrels per day, and ownership in a logistics business, according to Andeavor website.
Valero, which has similar overall refining capacity of 3.1 million barrels per day, has refineries in Canada and Britain apart from the United States.
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