(Reuters) – Marathon Petroleum Corp is set to buy Andeavor for more than $20 billion, the Wall Street Journal reported on Sunday, in a combination that would leapfrog Valero Energy Corp to create the largest U.S. refiner by capacity.
The potential cash-and-stock deal, which is expected to be announced on Monday, values Andeavor at about $150 per share, the WSJ reported, citing sources.
The offer would represent a premium of 22.6 percent to Andeavor stock’s Friday close.
The companied company will have the ability to process about 3.1 million barrels per day and have a large network of retail stations, oil, natural gas and refined products pipelines.
The deal is expected to produce $1 billion of synergies, the paper said.
Marathon Chief Executive Gary Heminger is expected to run the combined company, with a senior role for Andeavor’s chief executive, Gregory Goff, it said.
San Antonio, Texas-based Andeavor, formerly known as Tesoro, operates 10 refineries in the western United States with a refining capacity of about 1.2 million barrels per day, and ownership in a logistics business, according to Andeavor website.
Valero, which has similar overall refining capacity of 3.1 million barrels per day, has refineries in Canada and Britain apart from the United States.
Marathon and Andeavor were not immediately available for comment outside regular business hours.
Reporting by Shubham Kalia in Bengaluru, additional reporting Gary McWilliams in Houston; Editing by Gopakumar Warrier