Summary
Marathon Petroleum Corporation (MPC) filed an 8-K on November 17, 2015, detailing a significant amendment to its merger agreement with MarkWest Energy Partners, L.P. (MWE) through its subsidiary MPLX LP. This second amendment to the merger agreement substantially increases the cash component of the consideration being offered to MWE unitholders. The revised deal now offers $6.20 in cash per MWE common unit, along with 1.090 MPLX common units, representing a notable increase from prior agreements. This transaction, which aims to merge MWE into MPLX and make MWE a wholly owned subsidiary of MPLX, is a strategic move for MPC. The increased cash outlay, funded by MPC through a $1.28 billion cash contribution to MPLX, underscores MPC's commitment to this acquisition. Investors should note that MPC indirectly holds a significant stake in MPLX, highlighting the integrated nature of these entities and MPC's substantial influence over the combined operations. The approval of MWE unitholders remains a key condition for the merger's completion.
Key Highlights
- 1MPC's subsidiary MPLX LP entered into a second amendment to its merger agreement with MarkWest Energy Partners, L.P. (MWE).
- 2The total cash consideration per MWE common unit has been increased to $6.20.
- 3Each MWE common unit will be converted into 1.090 common units of MPLX LP and $6.20 in cash.
- 4MPC will contribute approximately $1.28 billion in cash to MPLX to fund the cash portion of the merger consideration.
- 5The merger is contingent upon customary closing conditions, including approval by MWE unitholders.
- 6MPC indirectly holds a 70.9% interest in MPLX common units, demonstrating a significant existing relationship.