Summary
MPLX LP (MPLX) announced on March 16, 2016, a significant acquisition of its parent Marathon Petroleum Corporation's (MPC) inland marine business, Hardin Street Marine LLC (HSM), for approximately $600 million in equity consideration. This strategic move is expected to bolster MPLX's logistics and transportation capabilities by adding 18 tow boats and 205 barges, which handle a substantial portion of MPC's inland marine volumes, primarily in the Midwest and U.S. Gulf Coast. The transaction involves the issuance of new MPLX common units to MPLX Logistics Holdings LLC and general partner units to MPLX GP LLC, both wholly-owned subsidiaries of MPC. The acquisition is structured through intercompany contributions and is anticipated to close by March 31, 2016. This deal underscores MPLX's strategy to integrate and grow its midstream operations through dropdowns from its parent, enhancing its asset base and revenue streams.
Key Highlights
- 1MPLX LP to acquire MPC's inland marine business (Hardin Street Marine LLC) for approximately $600 million in equity.
- 2The acquired business includes 18 tow boats and 205 barges, crucial for MPC's light products, heavy oils, and crude oil transportation.
- 3The transaction is expected to close by March 31, 2016.
- 4MPLX will issue common units to MPLX Logistics Holdings LLC and general partner units to MPLX GP LLC as consideration.
- 5The acquired marine business accounts for nearly 60% of MPC's total inland marine shipping volumes.
- 6The transaction was approved by the conflicts committee and board of directors of MPLX GP LLC, with independent advisors retained.
- 7MPC, through its subsidiaries, is a significant unitholder and controls the general partner and incentive distribution rights of MPLX.