Tesoro Corp. and Western Refining Inc. have completed their merger for a total consideration of about $5.8 billion, according to a June 1 news release.
Tesoro will change its name to Andeavor as a result, while Tesoro Logistics LP will be renamed Andeavor Logistics on Aug. 1. The combined company remains committed to achieving their expected EPS accretion of 10% to 13% in 2018, its first full year of operations.
"Acquiring the business at an attractive price relative to its intrinsic value and the delivery of synergies positions us well to create significant shareholder value," said Tesoro chairman and CEO Greg Goff. "We are well prepared and will immediately move forward with the integration of our companies and capturing synergies. We have evaluated ideas and opportunities to capture synergies over the last few months and are very confident in our ability to achieve our target of $350 to $425 million in annual synergies."
Tesoro's Logistics business now consists of its about 33% limited partnership interest in Tesoro Logistics and ownership of its general partner as well its approximate 53% limited partnership ownership interest of Western Refining Logistics LP and ownership of its general partner. Tesoro expects capital expenditures to reach about $1.35 billion, with $1.0 billion at Tesoro, $325 million at Tesoro Logistics and $25 million at Western Refining Logistics. Turnaround expenditures for the full-year 2017 are expected to be at about $465 million.
Tesoro also appointed Paul Foster to its board, while Jeff Stevens was appointed to both boards of Tesoro and Tesoro Logistics. Foster and Stevens previously served as directors and executive officers of Western Refining, with Foster having served as chairman of the board and executive chairman and Stevens having served as CEO and director.
Goff will be retained as chairman, president and CEO of the combined company, as previously announced, while Steven Sterin would continue as executive vice president, CFO and president of Tesoro Logistics.