Marathon and Andeavor deal to create leading US refining, marketing and midstream company

Marathon Petroleum is to acquire Andeavor in a $36bn deal that will create a leading nationwide integrated energy company in the US with an initial enterprise value greater than $90bn. The companies expect more than $1bn in tangible cost and operating synergies.

Commenting on the news, Samuel Davis, Wood Mackenzie Research Director, says: ‘The deal is expected to position Marathon as the largest US refiner with a combined 3mn b/d of refining capacity, with geographic diversification away from its core Midwest and Gulf Coast refining markets. For both companies, the biggest advantage of the deal is the scale and diversification that it brings away from current footprints. Marathon acquires high quality refining assets in the West Coast and Pacific NorthWest, while Andeavor reduces its direct exposure to future downturns in West Coast refining.’