Engineering News

Marathon Sells Minn. Refinery
December 01, 2010

Marathon Oil Corp. announced Wednesday that its wholly owned subsidiary Marathon Petroleum Company LP (MPC) has closed the transaction with ACON Investments, LLC (ACON) and TPG Capital (TPG) for the sale of most of Marathon's Minnesota downstream assets. ACON and TPG formed Northern Tier Energy LLC (Northern Tier Energy) to operate the assets as a stand-alone company.

Included in the transaction is the 74,000 barrel per day St. Paul Park refinery and associated terminals, 166 SuperAmerica convenience stores (including six stores in Wisconsin), SuperMom's bakery and commissary, SuperAmerica Franchising LLC, interests in pipeline assets in Minnesota and associated inventories. The total sales value is approximately $935 million including Northern Tier preferred stock with a stated value of $80 million. Approximately $330 million of the total sales value is for the inventories associated with these operations. The transaction also contains earnout and margin support components where Marathon could receive up to an additional $125 million over eight years or may be required to provide up to $60 million of margin support to the buyers, subject to certain conditions. Any margin support paid will increase the total earnout amount that may be received by Marathon.

Marathon is an integrated international energy company engaged in exploration and production; oil sands mining; integrated gas; and refining, marketing and transportation operations. Marathon, which is based in Houston, has principal operations in the United States, Angola, Canada, Equatorial Guinea, Indonesia, Libya, Norway, Poland, Iraqi Kurdistan region and the United Kingdom. Marathon is the fourth largest United States-based integrated oil company and the nation's fifth largest refiner.

ACON Investments is a Washington, D.C. based private equity firm with offices in Los Angeles, Houston, Madrid, Sao Paulo, and Mexico City. Founded in 1996, ACON manages private equity funds and special purpose investment partnerships with investments in the United States, Europe and Latin America. ACON has been a longtime energy investor, with experience in upstream and mid-stream oil and gas as well as investments in power infrastructure and energy services, including Mariner Energy, Chroma Oil and Gas, Milagro Oil and Gas, Signal International, Tropigas Inc, and SAE Towers.

TPG Capital is the global buyout group of TPG, a leading private investment firm founded in 1992, with more than $48 billion of assets under management and offices in San Francisco, Beijing, Fort Worth, Hong Kong, London, Luxembourg, Melbourne, Moscow, Mumbai, New York, Paris, Shanghai, Singapore and Tokyo. TPG Capital has extensive experience with global public and private investments executed through leveraged buyouts, recapitalizations, spinouts, growth investments, joint ventures and restructurings. TPG has significant experience in the energy sector with investments including Alinta Energy, Belden & Blake, Copano Energy, Denbury Resources, Energy Future Holdings (formerly TXU), Texas Genco, and Valerus Compression Services. TPG has also been an active investor in the retail sector with investments including American Tire Distributors, Burger King, Debenhams, J.Crew, Myer, Neiman Marcus and PETCO.

Source: Marathon Oil Corp.

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