Tuesday, May 13, 2008 6:04:01 PM
Alon USA agrees to buy Valero's Louisiana refinery
San Antonio Business Journal
Thursday, May 8, 2008
http://tinyurl.com/6yfo5l
Valero Energy Corp. has agreed to sell its Krotz Springs, La., refinery to Alon USA Energy Inc. for $333 million, the company said Thursday.
The boards of directors of both Valero (NYSE: VLO) and Alon USA (NYSE: ALJ) have approved the transaction and the sale is expected to close in July pending regulatory approvals.
Valero could receive an earn-out provision valued in excess of $100 million if certain milestones are met.
The sale will also include working capital at the refinery, which will be valued at market prices at the time of closing.
"The Krotz Springs refinery is a good fit for Alon and this transaction is a good deal for Valero's stockholders," Valero Chairman and CEO Bill Klesse says. "This transaction is consistent with our strategy to concentrate on our core refineries where we see higher returns for the long run."
Valero officials said earlier this year that it would explore strategic alternatives for the 85,000 barrel-per-day refinery. It is also exploring options for its refineries in Aruba, Memphis and Ardmore, Okla.
Last year, the oil refiner sold its 160,000 barrel-per-day refinery in Lima, Ohio, to Husky Energy Corp. in Canada.
Valero officials have said previously that the refinery sales represent a strategic move to sell off assets at a premium to what the company paid for them.
J.P. Morgan Securities Inc. acted as the exclusive financial adviser to Valero on this transaction.
San Antonio-based Valero currently owns and operates 17 refineries throughout the United States, Canada and the Caribbean with a combined throughput capacity of 3.1 million barrels per day.
Alon USA is a Dallas-based independent refiner and marketer of petroleum products.
Web site: HTTP://www.valero.com
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