LONDON (ShareCast) - (Sharecast News) - US midstream oil companies MPLX and Andeavor Logistics are to merge in a $9bn deal, it was announced on Wednesday.
Downstream energy firm Marathon Petroleum acquired rival oil refiner Andeavor last year in a $23bn deal, creating the largest crude processor in the US. Wednesday's announcement will see Marathon merge Andeavor's midstream business Andeavor Logistics with MPLX, a rival midstream business it already owned.

Both companies, which transport, store and market crude oil and refined products, are master limited partnerships.

Gary Heminger, chairman and chief executive of Marathon, said: "This transaction simplifies our MLPs into a single-listed entity and creates a leading, large-scale diversified midstream company anchored by fee-based cash flows.

"The combined entity will have an expanded geographic footprint which we believe enhances our long-term growth opportunities and the sustainable cash flow of the business. We are confident about the midstream growth and value-creation opportunities that exist across this combined platform in the best basins in the US."

Under the terms of the deal, which have been approved by the boards of MPLX and Andeavor Logistics, MPLX will acquire Andeavor Logistics in a unit-for-unit transaction.

Unitholders in Andeavor Logistics will receive 1.135 MPLX common units for each common unit they hold, while Marathon will receive 1.0328 MPLX common units for each Andeavor Logistics common unit held. The enterprise value of the deal, which is expected to close in the second half of 2019, is $14bn.

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