CVR Energy to Buy Two Marathon Refineries for $4.2 Billion

CVR Energy Inc. has agreed to buy two Midwest refineries from Marathon Petroleum Corp. for $4.2 billion, nearly doubling its refining capacity, the companies said Tuesday.

The transaction covers Marathon’s 105,000-b/d St. Paul Park refinery in Minnesota and 72,000-b/d Mandan refinery in North Dakota. The acquisition increases CVR’s crude capacity from about 207,000 b/d to 384,000 b/d, expanding operations beyond its existing plants in Coffeyville, Kan., and Wynnewood, Okla.

The acquired facilities process about 126,000 b/d of Bakken crude and just under 50,000 b/d of Canadian crude, CVR said on an earnings call Tuesday.

The purchase also includes a marketing business supplying up to 590 branded fuel locations across the Upper Midwest and Northern Great Plains. Historically, only about 15% of the two refineries’ output is sold into the bulk market, substantially less than CVR’s existing operations, management said on the call.

The $4.2 billion purchase price includes $3.45 billion for the refining assets and $750 million for related midstream assets. CVR plans to fund the deal with $2.5 billion in committed secured debt, a $500 million equity commitment from controlling shareholder Carl Icahn, an $800 million equity investment from Trafigura US Holdings and cash on hand. Trafigura will also become the exclusive crude supplier to the acquired refineries.

Marathon said it plans to reinvest most of the proceeds into projects along the U.S. Gulf Coast, while midstream affiliate MPLX plans to direct capital toward growth in the Permian and Marcellus basins. The transaction is expected to close by the end of 2026.

Reporting by Allegra Fradkin, afradkin@opisnet.com; Editing by Dean Visser, dean.visser@dowjones.com