Marathon Petroleum Will Buy BP's Texas City Refinery and Assets

Marathon Petroleum Corporation MPC today announced it has signed a definitive agreement to purchase BP's 451,000 barrel per calendar day (475,000 barrel per stream day) Texas City refinery, 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. The acquisition is expected to be funded with cash on hand, and is anticipated to close early in 2013, subject to customary closing conditions and regulatory approvals.