Industry Merger

This week Marathon Petroleum Company has agreed to purchase Andeavor, a large oil refiner for $23.3 billion. Bloomberg stated, “The offer, payable in either cash or shares, values Andeavor at about $152.27 a share, the companies said in a statement on Monday. That’s about a 24 percent premium over Friday’s closing price.”

The merger is significant to the industry because this now creates the largest U.S. refinery surpassing rival Valero. Marathon Chief Executive Gary Heminger is expected to run the combined company and Andeavor CEO Gregory Goff would join Marathon as executive vice chairman, as noted by the Wall Street Journal.


According to Reuters, “shale oil fields have pushed U.S. crude production to record highs and industry experts argue operations that have capacity to refine light crude like Andeavor will be better positioned to take advantage of the boom. Andeavor also runs refineries in Alaska, California, Minnesota, New Mexico, North Dakota, Texas, Utah and Washington which should complement Marathon’s largely Mid-West and Gulf Coast-based operations.”

Marathon is now one of the biggest refiners in the United States and their strategies will have major impact on US supply. According to the WSJ, “if the deal closes, Marathon will become the largest U.S. refiner, with 16 plants and about 3 million barrels a day of capacity, a massive pipeline network through two partnerships it would control and a retail network of thousands of gas stations, according to Tudor Pickering Holt & Co. The company would control about 16% of U.S. refining capacity.”


Written by:

As Director of Marketing for Guttman Holdings, I lead our advertising, digital marketing, branding, and public relations strategies, and share my expertise to communicate key messaging to all our stakeholders. With my diversified leadership background, I also drive innovation and cutting-edge business practice and results, to generate interest in Guttman Energy, Guttman Renewables, and Source One service offerings.

Guttman Energy Daily Market Update Disclaimer – The information contained in this market update is derived from sources believed to be reliable; however this update could include technical inaccuracies or typographical errors and Guttman Energy does not guarantee the accuracy, completeness or reliability of this update. FURTHERMORE, THIS UPDATE IS PROVIDED “AS IS,” WHERE IS, WITH ALL FAULTS AND WITHOUT ANY WARRANTY OR CONDITION OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY. GUTTMAN ENERGY ALSO SPECIFICALLY DISCLAIMS ALL EXPRESS AND IMPLIED WARRANTIES. YOU USE THIS UPDATE AT YOUR SOLE RISK. This update and any view or comment expressed herein are provided for informational purposes only and should not be interpreted in any way as recommendation or inducement to buy or sell products, commodity futures or options contracts.