Giant Industries To Be Sold To Western Refining
Store Clerk Claims Entrapment By Tank Top

GIANT INDUSTRIES TO BE SOLD TO WESTERN REFINING

SCOTTSDALE, AZ. — Giant Industries, based here, has signed a deal to be acquired by El Paso, TX.-based Western Refining Inc. for $1.23 billion in cash, plus the assumption of $275 million in debt.

When the sale is closed, Western Refining Inc. will be the fourth-largest publicly traded independent oil refiner in the United States with a capacity of approximately 216,000 barrels per day.

Included in the deal are Giant Industries' assets including three refineries — the Ciniza refinery, near Gallup, NM., the Bloomfield refinery, near Farmington, NM., and one in Yorktown, VA. — as well as a crude oil gathering pipeline system based in Farmington that services the New Mexico refineries, terminals in Albuquerque and Flagstaff, a fleet of product truck transports and a chain of retail service station and convenience stores in New Mexico, Colorado and Arizona.

Giant is also the parent company of distributors Phoenix Fuel Co. Inc., based in Phoenix, AZ., and Dial Oil Co., based in Aztec, NM., which market fuel in the Southwest. Their operations will also be transferred to the ownership of Western Refining.

Fred Holliger, Giant's Chairman and Chief Executive Officer, said, "Western is a company that we know well, and we believe that our employees will benefit from the cultural fit. I thank each of our employees for their many contributions that have helped build Giant and achieve the successes that enabled our shareholders to realize the significant value this transaction will deliver." He added, "We are committed to completing the transaction as expeditiously as possible and to ensuring a seamless transition."

Western Refining President and CEO Paul Foster said that "no job losses are expected" but a transition team of officials from both companies will organize to review how best to integrate the two companies' operations and report in from nine to 12 months. Foster will remain President and Chief Executive Officer of Western following the close of the acquisition. Holliger will stay involved in the company as a special advisor to the Western Refining Board of Directors.

"We look forward to Giant's employees joining the Western team following closing," stated Foster. "I'm confident that the substantial employee talent and operating expertise from both companies will enable us to achieve significant growth."

The headquarters of the combined company will be located in El Paso and Western will maintain offices in Scottsdale.

The deal is expected to close in the fourth quarter, pending government approvals.

STORE CLERK CLAIMS ENTRAPMENT BY TANK TOP

HAUSER, OR. — A store owner claims he was subject to entrapment after his clerk mistakenly sold alcohol to a minor when he was distracted by her tank top.

The clerk told local reporters that he was distracted by his customer's tank top and didn't notice the red "Minor until 2007" stamped on her driver's license. He sold the underage customer — a decoy sent by the Oregon Liquor Control Commission (OLCC) — a six-pack of beer.

Because she was underage, the OLCC fined store owner David Cardwell $1,320 and the clerk $750 as a result of the sting or gave Cardwell the option of closing the store for a week as punishment. Cardwell chose to close the store and then seek media attention to what he called entrapment.

"This young woman was dressed in very provocative clothing more suited for the bedroom," Cardwell, who was not there during the incident, said in a letter to the OLCC. "I would not allow my daughter to leave the house dressed in such a way."

Cardwell added, "We feel we did everything right. We trained [our clerk] correctly. We tested him correctly."

Gary Francis, the local OLCC agent who coordinated the sting and hired the decoys, replied, "Maybe he [the clerk] should have been looking at her driver's license. It was a straight-up deal. By the numbers. No trickery at all."

Originally published in the September 2006 issue of O&A Marketing News.
Copyright 2006 by KAL Publications Inc.