Summary
MPLX LP (MPLX) announced a significant transaction on November 13, 2017, entering into a Membership Interests Contribution Agreement to acquire substantially all of Marathon Petroleum Corporation's (MPC) logistics and fuels distribution assets. This strategic move involves MPC contributing its membership interests in MPLX Refining Logistics LLC and MPLX Fuels Distribution LLC to MPLX LP for a total consideration of approximately $8.1 billion. The transaction is structured as a combination of cash and MPLX common units, with MPLX LP planning to fund the cash portion through a new term loan facility. This acquisition is a key step in MPLX's strategy to integrate and grow its midstream infrastructure assets. The deal is expected to close around February 1, 2018, subject to customary closing conditions. Investors should note the approval process, including the involvement of an independent conflicts committee, and the issuance of new common units to MPC's subsidiaries, which will dilute existing unitholder ownership but expand MPLX's asset base.
Key Highlights
- 1MPLX LP to acquire MPLX Refining Logistics and MPLX Fuels Distribution from MPC for approximately $8.1 billion.
- 2Transaction consideration comprises $4.1 billion in cash and $4.0 billion in MPLX common units.
- 3MPLX LP will fund the cash consideration through a committed term loan facility.
- 4New MPLX common units will be issued to MPC's subsidiaries (General Partner, MPLX Logistics, MPLX Holdings).
- 5The transaction is expected to close on or about February 1, 2018.
- 6MPLX LP's conflicts committee and the General Partner's board of directors approved the transaction.
- 7MPC's indirect ownership in MPLX LP prior to the transaction was approximately 29% of common units and 100% of incentive distribution rights.