Marathon Petroleum to Acquire Andeavor for $23.3 Billion
Par Pacific Closes Cenex Zip Trip Deal
Visa Requires Zip Codes for Pay-at-the-Pump
VP Racing Fuels Enters Carwash Business

MARATHON PETROLEUM TO ACQUIRE ANDEAVOR FOR $23.3 BILLION

FINDLAY, OH. — Marathon Petroleum Corporation announced at the end of April that they have signed a deal to acquire Andeavor for $23.3 billion.

The Board of Directors for both companies unanimously approved the transaction, which is expected to close in the second half of the year, although Marathon and Andeavor shareholders still need to approve the deal.

Marathon's headquarters will remain in Findlay and the combined business will maintain an office in San Antonio, TX., at Andeavor's current headquarters.

Gary Heminger will remain chairman and CEO of Marathon and Greg Goff, currently serving as Andeavor chairman and CEO, will join Marathon as executive vice chairman.

Included in the deal are all of Andeavor's assets including its retail marketing system of over 3,200 gasoline stations and convenience stores flying the Arco, SuperAmerica, Shell, Exxon, Mobil, Tesoro, USA Gasoline, and Giant brands. Marathon's primary brands are Marathon and Speedway.

Andeavor is also supplying fuel to over 80 stations in northwest Mexico, including 57 stations operating as Arco branded retailers.

Officials said they have not decided which brands will be the focus of the combined company although they noted the value of the Arco brand in the West and Mexico.

Also included are Andeavor's 10 refineries with a combined capacity of approximately 1.2 million barrels per day in the mid-continent and western U.S. and ownership of Andeavor Logistics LP which handles the company's pipeline and terminal operations in 12 states, primarily in the West.

With the addition of Andeavor's West and Midwest assets, Marathon will have a market presence from coast-to-coast across the United States and the company will become the largest American oil refiner with a capacity of 3 million barrels a day.

"The time is right now because, for this industry, the wind is behind our backs," said Goff. "Look at the map of the two companies and the way they are positioned geographically in the United States and you come to the conclusion that this is a great opportunity to be able to bring the companies together."

"This transaction combines two strong, complementary companies to create a leading U.S. refining, marketing, and midstream company, building a platform that is well-positioned for long-term growth and shareholder value creation," said Heminger in an official statement. "It geographically diversifies our refining portfolio into attractive markets, increases access to advantaged feedstocks, enhances our midstream footprint in the Permian basin, and creates a nationwide retail and marketing portfolio that will substantially improve efficiencies and enhance our ability to serve customers."

Marathon and Andeavor leadership believe the combination will create $1 billion savings for the companies within three years of the merger.

"I think the synergies are much greater," said Heminger. "What we put in the deck are what we are absolutely confident we are going to achieve in short order. Now is the time in being able to accomplish that."

The deal is expected to close by the end of the year, pending stockholder and government approvals.

PAR PACIFIC CLOSES CENEX ZIP TRIP DEAL

HOUSTON, TX. — Par Pacific Holdings Inc., based here, has closed their deal to acquire 33 Cenex Zip Trip service stations with convenience stores from CHS Inc. The purchase price was reported to be $70 million plus the value of inventory at the closing in March.

The 33 locations are located in eastern Washington and northwestern Idaho.

As part of the deal, Par Pacific agreed to continue using Cenex refined products in the newly-acquired service stations and Cenex will utilize Par Pacific to supply refined products into some of their remaining CHS locations.

Following the sale, CHS will continue to own 35 Cenex Zip Trip service stations, located Minnesota, Montana, North Dakota, South Dakota and Wyoming.

In addition to their newly acquired sites, Par Pacific Holdings currently owns and operates refineries in Hawaii and Wyoming as well as 91 retail locations in the island state.

VISA REQUIRES ZIP CODES FOR PAY-AT-THE-PUMP

LOS ANGELES, CA. — Visa has announced that service stations and other fuel merchants in "high fraud" areas will be required to authenticate all customer credit card purchases with zip code information.

Visa officials announced earlier this year that all service station owners in certain cities offering pay-at-the-pump must require their customers to enter their zip code in order to authorize the pump for the sale. Fuel merchants that sell fuel "on the basis of a membership" — such as Costco — were not required to add the additional security measure.

If a customer is unable to enter a correct zip code into a dispenser, Visa asks that the pump remain turned off and direct the customer to pay for their fuel inside the service station or convenience store.

The requirement to update their dispensers and credit card interface was mandated by Visa to be used in Fresno and greater Los Angeles, CA.; Kingman, AZ., and Las Vegas, NV., in the West — areas the credit card company identified as "high-fraud geographies." Gasoline retailers in these cities should have already reprogrammed their dispensers for Visa's new requirements.

Outside the West, the cities of Atlanta, GA., Brooklyn, NY., Detroit, MI., Houston, TX.; Louisville, KY., and the entire state of Florida were mandated to add the additional payment security.

VP RACING FUELS ENTERS CARWASH BUSINESS

LAS VEGAS, NV. — VP Racing Fuels announced they are launching a new carwash program in a move to expand the company's presence in the branded retail market.

The carwash program, which will operate under the name VP Powerwash, will include site surveys, building selection, construction, and equipment including car wash management systems technology.

VP Powerwash will also offer its operators training as well as a Powerwash product line with VP's Mad Bubbles brand.

The program will also offer full parts inventory back-up to carwash owners in conjunction with Sonny's The CarWash Factory, the national carwash equipment distributor.

"Everything we do at VP is known for its quality, speed and performance," said Chris Wall, VP Racing Fuels senior director of Branded Retail, announcing the company's new division. "We've built the brand, the excitement, and the following and that should help customers and consumers make the move to VP."

VP has been aggressively moving into branded retail over the last few years. In addition to its VP Racing Fuels line, the company has expanded to over 300 VP branded c-stores in the United States and Mexico. Last year, VP launched its quick lube brand, VP FastLube.

The company said they will promote the Powerwash brand with national advertising, loyalty programs, and cross promotions with its VP FastLube and VP branded gasoline stations.

Originally published in the June 2018 issue of O&A Marketing News.
Copyright 2018 by KAL Publications Inc.