US pipeline operator Andeavor Logistics LP (NYSE:ANDX) is set to move into the Permian Basin in Texas after it agreed to buy out rival Western Refining Logistics (NYSE:WNRL) in a deal worth US$1.5bn.
Texas-based Western Refining owns pipelines and gathering assets in the Permian Basin, where it is estimated that more than 15mln barrels of oil have been produced over the past 25 years or so.
Western Refining investors will receive 0.5233 Andeavor Logistics shares for each Western share held.
That values each Western Refining share at US$25.28 – a premium of just over 6% on last week’s closing price.
Andeavour, formerly known as Tesoro Corp, bought Western Refining Inc earlier this summer for US$4.1bn and also acquired a non-controlling stake in Western Refining Logistics as part of that deal.
Andeavor Logistics will also issue 78mln shares to its parent Andeavor (NYSE:ANDV) once the deal closes to cancel its incentive distribution rights.
Andeavour Logistics were unchanged at US$48.37, while Western Refining Logistics jumped 4.5% to US$24.85.