(REUTERS/John Gress JG)
Marathon Petroleum Corp. plans to buy pipeline and refining company Andeavor for more than $20 billion, according to people familiar with the matter.
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The cash-and-stock deal, which values Andeavor at about $150 a share, is expected to be announced Monday. That would be a roughly 23% premium over Andeavor’s closing price Friday after the stock surged about 50% in the past year.
Marathon, based in Findlay, Ohio, is the second-largest refiner in the U.S., according to its website. Marathon-branded gasoline is sold in 20 states, and its Speedway unit owns the nation’s second-largest convenience-store chain. It also owns a midstream master limited partnership with about 11,000 miles of crude oil and light-product pipelines.
Andeavor, based in San Antonio and formerly known as Tesoro, operates 10 refineries in the western U.S. with total capacity of more than 1.2 million barrels a day. Part of the rationale of the deal centers on the companies’ complementary footprints; with Marathon in the East and Andeavor in the West, regulatory approval could be easier to win.
The deal is expected to produce $1 billion of synergies, people familiar with the matter said.
Marathon Chief Executive Gary Heminger is expected to run the combined company, with a senior role for his counterpart at Andeavor, Gregory Goff.
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Utilities and energy merger activity has surged this year as oil prices recover. There have been about $164.5 billion of deals year-to-date, more than double the comparable figure last year, according to Dealogic.
Write to Dana Cimilluca at dana.cimilluca@wsj.com and Dana Mattioli at dana.mattioli@wsj.com
