8-KMaterial AgreementsExhibits & Filings

Marathon Petroleum Corp 8-K Report, Material Agreement (Oct 9, 2012)

Filed October 9, 2012For Securities:MPC

Summary

Marathon Petroleum Corporation (MPC) announced a significant acquisition through its wholly owned subsidiary, Marathon Petroleum Company LP, on October 7, 2012. The company entered into a purchase and sale agreement to acquire certain refining, logistics, and marketing assets from BP Products North America Inc. and BP Pipelines (North America) Inc. This strategic move includes BP's Texas City, Texas refinery with a capacity of 451,000 barrels per calendar day, associated NGL pipelines, product terminals, and a branded marketing network of approximately 1,200 sites in the Southeastern United States. The total consideration for the acquisition includes a base purchase price of $598 million in cash, plus the value of inventories at closing (estimated at $1.2 billion), and a potential contingent earnout of up to $700 million over six years. MPC expects to fund the transaction with existing cash on hand. The closing of this deal is anticipated for early 2013, pending customary closing conditions and regulatory approvals. This acquisition represents a substantial expansion of MPC's refining and marketing footprint.

Key Highlights

  • 1MPC is acquiring significant refining, logistics, and marketing assets from BP.
  • 2The key asset is BP's Texas City refinery with a capacity of 451,000 bpd.
  • 3The acquisition includes three NGL pipelines, four product terminals, and marketing contracts for 1,200 branded sites in the Southeast.
  • 4The base purchase price is $598 million cash, plus inventory estimated at $1.2 billion.
  • 5A contingent earnout of up to $700 million over six years is also part of the deal.
  • 6The transaction is expected to be funded by cash on hand.
  • 7Closing is anticipated in early 2013, subject to regulatory approvals and customary conditions.

Frequently Asked Questions

Marathon Petroleum is acquiring BP's Texas City refinery, three intrastate NGL pipelines originating from the refinery, four light product terminals, and marketing contracts for approximately 1,200 branded sites in the Southeastern United States. An electric cogeneration facility at the Texas City refinery is also included.

The total estimated cost includes a base purchase price of $598 million in cash, plus the value of inventories at closing, which is estimated at approximately $1.2 billion. Additionally, there is a potential contingent earnout payment of up to $700 million over a six-year period, depending on certain conditions.

Marathon Petroleum expects to fund the acquisition using its existing cash on hand.

The acquisition is expected to close early in 2013, contingent upon the satisfaction of customary closing conditions, including obtaining necessary regulatory approvals.