Tesoro now 5th-largest U.S. refiner with Western Refining acquisition

Tesoro Corp. is buying El Paso-based Western Refining for $4.1 billion in a transaction that adds three new facilities to the San Antonio company’s portfolio and makes it the 5th-largest U.S. refiner able to process almost 1.1 million barrels a day.

The deal puts Tesoro closer to the more productive Permian Basin, the companies announced before the markets opened Thursday. Shares of Western Refining soared 23.1 percent to $37.55.

The Alamo area will now account for roughly 17.2 percent of all oil refined in the U.S. between Tesoro’s expanded capabilities and the roughly 2.1 million barrels processed daily by San Antonio-based Valero Energy Corp., the nation’s largest refiner of petroleum products.

Tesoro is offering Western’s shareholders 0.435 shares of Tesoro stock per Western unit, or $37.30 per share, a 22 percent premium over Wednesday’s closing price. The deal is valued at $6.4 billion after including Western’s $1.7 billion in debt and a non-controlling interest in Western Refining Logistics, which manages pipeline, storage and transport infrastructure for Western. The logistics operation is valued at $605 million.

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