US Marathon to spin off refining business on 30 June
14 January 2011 17:15 [Source: ICIS news]
HOUSTON (ICIS)--US-based energy major Marathon Oil’s board of directors has approved a plan to spin off its downstream refining and marketing business, a move followed by a slight drop in the company's stock price on Friday.
The spin-off should become effective on 30 June.
It will create Marathon Petroleum, the fifth-largest ?xml:namespace>US refiner with a 1.1m bbl/day capacity among its six plants throughout the US Midwest, southeast, and Gulf coast regions. Marathon Petroleum will also oversee Marathon’s US logistical infrastructure.
Meanwhile, Marathon Oil will oversee crude oil production and exploration, oil sands mining and integrated gas.
Marathon previously had considered the division in mid 2008, but it was hampered by the economic downturn.
However, the company decided to move forward with the plan, citing a substantial improvement in the global-business and financial environments over the last two years.
The spin-off will allow each company to be more flexible and more transparent, Marathon said. Moreover, each company could pursue its own strategy and goals.
The company intends to distribute one share of Marathon Petroleum for every two shares of Marathon held at a record date yet to be determined. A financing plan has been developed to implement the spin-off.
Marathon Petroleum will be based in Findlay, Ohio, and Marathon Oil in Houston.
Marathon stock traded at $42.81/share on the New York Stock Exchange, down 0.4%.
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