HollyFrontier Corporation is an independent petroleum refiner and marketer. It owns and operates petroleum refineries, which serves markets across the Mid-Continent, Southwest and Rocky Mountain geographic regions of the United States. The Company operates through three segments: Refining, Lubricants and Specialty Products, and HEP.
The Refining activities segment is involved in the purchase and refining of crude oil, and wholesale and branded marketing of refined products, such as gasoline, diesel fuel and jet fuel. The Lubricants and Specialty Products segment involves PCLI’s production operations, located in Mississauga, Ontario, which includes lubricant products, such as base oils, white oils, specialty products and finished lubricants. The HEP segment includes all of the operations of HEP, which owns and operates logistics and refinery assets consisting of petroleum product and crude oil pipelines, terminals, tankage, loading rack facilities and refinery processing units.
HollyFrontier Corp (HFC.N)will pay $2.6 billion for almost all of Sinclair Oil’s assets, adding new refining, pipeline and storage facilities in the U.S. Rocky Mountain region, the company’s chief executive said on Tuesday.
The deal comes as U.S. fuel demand recovers from last year’s COVID 19-led record lows, with states reopened and road travel trending near pre-pandemic levels.
“This is exceptionally transformative for us and differentiates us from other downstream businesses,” said HollyFrontier’s Chief Executive Mike Jennings in conference call on Tuesday.
The Sinclair deal follows HollyFrontier’s May announcement that it plans to buy an Anacortes, Washington refinery from Royal Dutch Shell Plc (RDSa.L) by the end of 2021 for about $500 million.
A new company, HF Sinclair Corp, will replace HollyFrontier as the public company trading on the New York Stock Exchange .
HollyFrontier said that at the closing of the deal, expected in mid-2022, HollyFrontier shares will covert into shares of HF Sinclair on a one-for-one basis.
HF Sinclair will then issue about 60.2 million shares to stockholders of The Sinclair Companies, Sinclair Oil’s parent, giving them 26.75% of proforma ownership in the new company.
As part of the deal, HollyFrontier will buy Sinclair’s branded marketing unit, renewable diesel unit and two Rocky Mountain-based refineries.