Marathon Petroleum Corp. (
) is up 5% to $57.60, but backing off a 52-week high of $60.04,
after it agreed to buy BP's (
) 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.