Western Acquisition Of Giant Gives It East Coast Refining Presence

Deal will create fourth-largest publicly traded independent refiner.

Western Refining and Giant Industries on Monday announced a definitive merger agreement under which Western will acquire Giant for $1.5 billion, or $83 per share, in cash.

After the deal, expected to close in the fourth quarter, Western will be the fourth-largest publicly traded independent refiner and marketer in the United States, with a total crude oil throughput capacity of about 216,000 barrels per day.

In addition to Western's 117,000 bpd refinery in El Paso, Texas, Western will gain an East Coast presence with a 62,000 bpd refinery in Yorktown, Virginia, and will gain two refineries in the Four Corners region of Northern New Mexico with a current combined capacity of 37,000 bpd.

Wester said that by expanding its refining operations from one to four facilities it will significantly diversify its operations in fast growing, high demand areas. the company will double its lower-cost sour and heavy crude processing capacity from approximately 12 percent currently to almost 25 percent; Western's sour and heavy crude processing capacity will reach 46 percent after following the completion of its previously announced expansion program at its El Paso facility.

Significant workforce reductions are not expected, the companies said.

Following the close of the transaction, Paul Foster will remain President and Chief Executive Officer of Western, and Fred Holliger will serve as a special advisor to Western's Board of Directors. The combined company will be headquartered in El Paso and will maintain offices in Scottsdale.

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