Andeavor, Andeavor Logistics LP and Western Refining Logistics LP have announced the merger of Andeavor Logistics and Western Refining Logistics and the financial repositioning of Andeavor Logistics through a buy-in of Andeavor Logistics' incentive distribution rights (IDRs).
Andeavor Logistics and Western Refining Logistics have jointly announced a definitive merger agreement whereby Andeavor Logistics will acquire Western Refining Logistics in a unit-for-unit exchange at a blended exchange ratio of 0.4921, representing an equity value of US$1.5 billion based on Andeavor Logistics closing unit price of US$48.31 on 11 August 2017. This represents an enterprise value of US$1.8 billion, including the assumption of approximately US$310 million of Western Refining Logistics' net debt.
It was also confirmed that Andeavor Logistics will issue, conditional upon the closing of the merger, 78 million ANDX common units to Andeavor in exchange for the cancellation of Andeavor Logistics' IDRs. The IDR Buy-In is expected to take place immediately after the Merger.
Greg Goff, Chairman and CEO of Andeavor, and Chief Executive Officer of Andeavor Logistics' and Western Refining Logistics' general partners, said: "Andeavor Logistics is well positioned for sustainable growth through the execution of our organic growth programs and strategic acquisitions, including drop downs from Andeavor […] The transactions announced today significantly improve the financial strength of Andeavor Logistics, reduce our cost of capital and clearly highlight the value of this growth business.
"These transactions create significant value for Andeavor shareholders and Andeavor Logistics unitholders, and offer Western Refining Logistics unitholders the opportunity to participate in the future growth of the combined logistics entity."
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