Referenced Stocks

UPDATE: Marathon Petroleum Acquires BP Assets; Marathon Jump 5%, Off New 52-Week High

By Midnight Trader,  October 08, 2012, 02:19:37 PM EDT

Marathon Petroleum Corp. ( MPC ) is up 5% to $57.60, but backing off a 52-week high of $60.04, after it agreed to buy BP's ( BP ) Texas City refinery, which produces 451,000 barrel per day.

As part of the deal, MPC will also acquire three intrastate NGL pipelines originating at the refinery, an allocation of BP's Colonial Pipeline Company shipper history, four terminals, retail marketing contract assignments for approximately 1,200 branded sites and a 1,040 megawatt cogeneration (cogen) facility.

The base purchase price is $598 million, plus inventories estimated at $1.2 billion. The agreement also contains an earnout provision under which MPC could pay up to an additional $700 million over six years, subject to certain conditions.

The transaction is expected to be accretive to earnings in the first year of operation, and is expected to be funded with cash on hand, and is anticipated to close early in 20113.

MPC has increased 83% in the last 12 months.

BP is down 0.02% at $42.13 and trades in a 52-week range of $36.25 - $48.34.




The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.


This article appears in: Investing, Commodities

Referenced Stocks: BP, MPC



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