Posted: 17 Nov, 2016

San Antonio, Texas-based, Tesoro will assimilate Western Refining in an all-stock transaction. The companies promised between $350 million and $425 million in annual synergies and expect to achieve 10% to 13% earnings per share accretion by 2018.

The two companies believe that the deal would expand the refiners' opportunities for logistics growth in crude oil production basins and product regions, particularly in West Texas' lucrative Permian Basin.

The deal continues a wave of consolidation among independent refiners in 2016, including Tesoro, which most recently acquired Madison, Wis.-based renewable fuels and chemicals company Virint and the 20,000 barrel-per-day Dakota Prairie, N.D. refinery from Calumet Specialty Productions Partners (CLMT) and MDU Resources (MDU), both for undisclosed sums.

Tesoro and Western Refining expect the deal to close in the first half of 2017 pending shareholder votes and regulatory approval.