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Slide #48. Tesoro Corporation — BP's Fully Integrated Southern California Refining and Marketing Business
Tesoro Corporation (TSO)
BP's Fully Integrated Southern California Refining and Marketing Business
Tesoro Corporation announced that its Board of Directors has approved agreements for the Company to purchase BP's integrated Southern California refining and marketing business. The purchase price of BP's assets is $1,175 million, plus the value of inventory at the time of closing. At current prices, the inventory is valued at approximately $1,300 million. The transaction is subject to regulatory approval and is expected to close before mid-2013. The purchase price is expected to be financed initially through a combination of cash and debt with proceeds from the subsequent sale of the associated logistics assets to Tesoro Logistics LP generating an estimated $1 billion of cash proceeds in the first year. Earnings per share accretion is expected to be about 24% in each of the first and second year of operations.
Tesoro is a petroleum refining, logistics and marketing company. Co.'s business is organized into three segments: refining, which refines crude oil and other feedstocks into transportation fuels, such as gasoline and gasoline blendstocks, jet fuel and diesel fuel, as well as other products; logistics, which is comprised of Tesoro Logistics LP's assets and operations, including certain crude oil and natural gas gathering assets, natural gas and natural gas liquids processing assets, and crude oil and refined products terminalling, transportation and storage assets acquired from Co. and third parties; and marketing, which sells transportation fuels through branded and unbranded channels.
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Strong Buy (3.82 out of 4)
(ranked higher than approx. 94% of all stocks covered)
Based on Zacks ABR data;
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