Israel’s Delek eyes $500m refining acquisition in North America

05 August 2010 17:54  [Source: ICIS news]

TORONTO (ICIS)--Delek US Holdings is targeting a major refining acquisition in North America, with an estimated “all-in value of $500m (€380m),” the US arm of Israel's diversified Delek Group said on Thursday.

“We see a lot of refining assets being in the market … this is the right time for us to strike,” chief executive Ezra Uzi Yemin told analysts during a conference call.

A possible deal could be worth up to $500m, Yemin said and went on to note the support the US affiliate has from its parent, Netanya-based Delek Group.

Delek US already operates a 60,000 bbl/day refinery in Tyler, Texas. It also holds a 34.6% interest in Lion Oil Company, a privately held 75,000 bbl/day refinery in El Dorado, Arkansas.

Yemin's remarks came after Delek and Shell this week ended negotiations over the acquisition of Shell’s 130,000 bbl/day refinery in Montreal. Shell will now close the refinery, which has base oil and wax capacity, and convert the site into a fuel terminal.

Yemin would not comment as to why the Montreal deal failed.

Canada’s French-language state media group RDI reported that Delek had offered Canadian dollar (C$) 420m ($412m) in a deal that would have included the refinery, for which Delek offered C$200m, as well as Shell’s petrol stations in Canada’s eastern provinces of Quebec, Nova Scotia, New Brunswick and Prince Edward Island.

Shell had demanded C$500m, RDI reported, citing unnamed union and government officials close to the talks.

Shell had been under pressure from Canada’s federal and the Quebec provincial government to sell the refinery to ensure its continued operation and safe some 500 jobs in Montreal.

($1 = €0.76; $1 = C$1.02)

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By: Stefan Baumgarten
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