Oil refiners Holly Corp. and Frontier Oil Corp. have agreed to merge into an enterprise with a combined value of $7 billion, the companies said in a joint statement Feb. 22.
The new company will be named HollyFrontier Corp. and will be based in Dallas at Holly's current headquarters.
The transaction, expected to be completed early in the third quarter, creates the most profitable independent refiner on a per barrel basis in the United States, according to the companies. The new company's refining capacity will be more than 440,000 barrels-per-day across five refineries.
The merger will allow the companies to increase their refining capacity in fast-growing regions and expand access low-cost Canadian crude oil, the companies said. HollyFrontier will serve the Mid-Continent, Rocky Mountain and Southwest refining markets.
HollyFrontier expects the merger to create annual cost savings of at least $30 million through reduced expenses and increased operational efficiencies.
Holly shareholders are expected to own approximately 51% of the company, with Frontier shareholders owning the remaining 49%.
