According to a news release from Tesoro, the total sale represents an value of $6.4 billion, including the assumption of approximately $1.7 billion of Western’s net debt and the $605 million market value of non-controlling interest in Western Refining Logistics.
“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. We have tremendous respect for the Tesoro team and are excited to be a part of a larger and more diverse organization to support our continued growth.”
El Paso Mayor Oscar Leeser released the following statement, regarding the sale:
“I believe the sale of Western Refining will bring new opportunities to our region as the combined companies will be able to leverage their assets during their expected growth. Western Refining has always been a great community partner here in El Paso, and as Mayor I want to formally welcome Tesoro to the Sun City.”
It is unknown at this time what impact the sale will have on the local Western Refining workforce. This transaction has been unanimously approved by the boards of directors of both companies.
“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.”
“Also, our increased scale and diversity will enable us to leverage and enhance in-house technical capabilities, which we expect will result in cost efficiencies, the ability to drive more growth and increased productivity,” Goff continued.
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, TX. Under the terms of the agreement, Western shareholders can elect to receive 0.4350 shares of Tesoro for each share of Western stock they own, or $37.30 in cash per share of Western stock.
According to Western Refining website, their refineries are located in El Paso, Gallup (NM) and St. Paul Park (Minnesota.) In 1997 the company Refinery Holding was formed to manage the refineries; it purchased them outright in 2000. Western Refining purchased a pipeline system from Chevron capable of delivering 115,000 barrels of crude oil per day.
In 2006 it became a publicly traded company on the New York Stock Exchange.
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.