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Delek US $DK to Acquire Remaining 53% Stake in Alon USA $ALJ for $464M

Delek US $DK to Acquire Remaining 53% Stake in Alon USA $ALJ for $464M

Delek US currently owns approximately 33.7 million shares of common stock of Alon, which it agreed to acquire in April 2015, as reported by ExitHub. In July 2016, Alon USA retained J.P. Morgan as its financial advisor, and Gibson Dunn as its legal advisor, to explore an exit for the company. Based on a closing price of $24.07 per share for Delek US common stock on Friday, December 30, 2016, the implied price for the Alon common stock is $12.13 per share. The owners of the remaining outstanding shares in Alon that Delek US does not currently own will receive a fixed exchange ratio of 0.5040 Delek US shares for each share of Alon. This represents a 5.6 percent premium to the 20 trading day volume weighted average ratio through and including December 30, 2016, of 0.477. Upon closing, the combined company will be primarily led by Delek US’ management team. The combined company will have a broad platform consisting of refining, logistics, retail, wholesale marketing, as well as renewables and asphalt operations. The refining system will have approximately 300,000 barrels per day of crude throughput capacity consisting of four locations and an integrated retail platform that includes 307 locations serving central and west Texas and New Mexico. Logistics operations include Delek Logistics which can benefit from future drop downs and organic projects to support a larger refining system. This combination will create a larger marketing operation with 600,000 barrels per month of space on the Colonial Pipeline System and a wholesale business with over 1.2 billion gallons of sales volume annually in the southwest. Alon USA Energy, headquartered in Dallas, Texas, is an independent refiner and marketer of petroleum products, operating primarily in the South Central, Southwestern and Western regions of the United States. Alon owns 100% of the general partner and 81.6% of the limited partner interests in Alon USA Partners, LP (NYSE: ALDW), which owns a crude oil refinery in Big Spring, Texas, with a crude oil throughput capacity of 73,000 barrels per day and an integrated wholesale marketing business. In addition, Alon directly owns a crude oil refinery in Krotz Springs, Louisiana, with a crude oil throughput capacity of 74,000 barrels per day. Alon also owns crude oil refineries in California, which have not processed crude oil since 2012. Alon owns a majority interest in a renewable fuels project in California, with a throughput capacity of 2,500 barrels per day. Alon is a leading marketer of asphalt, which it distributes primarily through asphalt terminals located predominately in the Southwestern and Western United States. Alon is the largest 7-Eleven licensee in the United States and operates approximately 300 convenience stores which also market motor fuels in Central and West Texas and New Mexico. Delek US Holdings is a diversified downstream energy company with assets in petroleum refining and logistics. The refining segment consists of refineries operated in Tyler, Texas and El Dorado, Arkansas with a combined nameplate production capacity of 155,000 barrels per day. Delek US Holdings, Inc. and its affiliates also own approximately 62 percent (including the 2 percent general partner interest) of Delek Logistics Partners, LP. Delek Logistics Partners, LP (NYSE: DKL) is a growth-oriented master limited partnership focused on owning and operating midstream energy infrastructure assets. Delek US Holdings, Inc. currently owns approximately 47 percent of the outstanding common stock of Alon USA Energy, Inc. (NYSE: ALJ). “We are excited to reach this agreement and believe this strategic combination will result in a larger, more diverse company that is well positioned to take advantage of opportunities in the market and better navigate the cyclical nature of our business,” said Uzi Yemin, Chairman, President and Chief Executive Officer of Delek US. “We expect to be able to achieve meaningful synergies across the organization and the combination will create a refining system that will be one of the largest buyers of crude from the Permian Basin among the independent refiners. Additionally, we expect the combined company will have the ability to unlock logistics value from Alon’s assets through future potential drop downs to Delek Logistics Partners and create a platform for future logistics projects to support a larger refining system,” he added. “We are excited to be joining Delek US and believe this agreement represents an excellent opportunity for Alon’s shareholders,” said David Wiessman, Chairman of Alon’s Special Committee. “The economies of scale, financial strength, and synergies generated through this merger create the opportunity to drive long-term value for shareholders and the all-stock transaction allows all shareholders to participate in the future performance of the combined company. I would like to thank Alon’s employees for their efforts, and our customers, suppliers and banks that supported our company, as we worked together to create value for our shareholders.” Wiessman is Chairman of Alon USA Partners. He is also Executive Chairman of Blue Square-Israel Ltd. (NYSE/TASE: BSI); and Executive Chairman and President of Dor Alon Energy Israel (1988) Ltd., which operates a chain of convenience stores and fuel supply in Israel and is listed on the Tel Aviv Stock Exchange. In 1994, Wiessman became Chief Executive Officer, President, and a Director of Alon Israel. Wiessman has also served as President and Chief Executive Officer of Alon from its formation in 2000 until May 2005, and as Executive Chairman from July 2000 to May 2015. In April this year, Alon Group, which is owned by Shraga Biran, David Wiessman, and a group of kibbutzim, was said to be considering an IPO on the Tel Aviv Stock Exchange as part of a 1.9 billion shekel debt settlement. Alon Group has experienced “a sweeping downward financial spiral at almost every level of its holdings pyramid in recent years (Alon Holdings Blue Square – Israel Ltd. (NYSE: BSI; TASE: BSI), the Mega retail chain), and has itself required a 2.2 billion shekel debt settlement,” said Globes. Most of the blame for the mess at Israel’s Mega supermarkets, which has been struggling with $360 million in debt, and has been in trouble for years, “goes to former CEO David Wiessman,” said Haaretz. However, in 2005 he was named “Israel’s Man of the Year.” In 1976, after serving in the Israeli Air Force, Wiessman became CEO and majority shareholder in Bielsol Group, a privately owned company that owns and operates gasoline stations and real estate in Israel. The transaction is expected to close in the first half of 2017 and is subject to customary closing conditions, including regulatory approval and approval by a majority of votes cast of Delek US shareholders and approval by the holders of a majority of the remaining 53 percent of Alon shares, which excludes the 47 percent of Alon shares owned by Delek US. Tudor, Pickering, Holt & Co. is serving as exclusive financial advisor on this transaction to Delek US. BofAMerrill Lynch and Barclays provided financial structuring advice to Delek US related to this transaction. Norton Rose Fulbright US LLP and Morris, Nichols Arsht & Tunnell LLP are serving as legal advisors for Delek US. J.P. Morgan is serving as exclusive financial advisor and Gibson Dunn & Crutcher LLP is serving as legal advisor for the Special Committee of Alon USA’s board of directors. Vinson & Elkins LLP is serving as legal advisor to Alon USA.]]>

Brookfield $BAM Buying $5.2B Petrobras Pipeline, @Shell Exiting Argentine Gas Stations

Brookfield $BAM Buying $5.2B Petrobras Pipeline, @Shell Exiting Argentine Gas Stations

Petrobras (NYSE: PBR) (BM&F Bovespa: PETR3, PETR4) agreed to sell its 1,560 miles natural gas pipeline Nova Transportadora do Sudeste for $5.2 billion, to a consortium led by Canada’s private equity giant Brookfield Asset Management Inc. (NYSE: BAM) (TSX: BAM.A), with the participation of British Columbia’s pension fund, China’s CIC, Singapore’s sovereign wealth fund GIC, and private equity firm First Reserve. The deal is subject to approval by the board of directors of Petrobras and Brazilian government authorities. So far this year, Petrobras had sold $3.9 billion in assets, of a total $15.1 billion target for divestments expected by the end of this year. Downsizing efforts have accelerated since May, when Pedro Parente was appointed as CEO of Petrobras, which is burdened with over $120 million in debt, the largest of any global oil firm. Brookfield, Canada’s largest private equity and alternative asset manager, has roughly $225 billion in assets under management. The firm invests in the property, power, and infrastructure sectors. Brookfield is based in Toronto, Canada with additional offices across North America, South America, Europe, Asia, and Australia. Brookfield, formerly known as Brascan Corp, was founded in 1899 as a builder and operator of electricity and transport infrastructure in Brazil, reflected in its earlier name which combined “Brasil” and Canada. The move would follow Brookfield’s agreement last month, to buy Brazilian engineering conglomerate Grupo Odebrecht’s 70 percent stake in water and sewage group Odebrecht Ambiental for $1.65 billion. Odebrecht Group, Brazil’s fourth largest private group, is a global conglomerate consisting of diversified businesses in the fields of engineering, construction, chemicals and petrochemicals. In June 2015, Brazilian authorities arrested the group’s chief executive Marcelo Odebrecht, in connection with an ongoing probe into bribes paid by Petrobras, which has seen Brazil’s former President Dilma Rouseff recently impeached, and her predecessor Luiz Inácio Lula da Silva, embroiled in the scandal. In March 2016, Marcelo Odebrecht was slapped with a 19-year prison sentence, for paying over $30 million in bribes to executives of Petrobras, in exchange for contracts and influence. In January, Brookfield acquired a 57.6 percent stake in power generator Isagen SA (Bolsa Colomb: ISAGEN) from the Government of Colombia for $1.99-billion, the largest privatization deal in the country in nearly a decade. WELL-OILED INTER-AMERICAN CROSS-BORDER ENERGY DEALS In July, Petrobras agreed to sell a 66% stake in its offshore exploration block BM-S-8 license in the Santos basin, to Norway’s Statoil ASA, for $2.5 billion. The divestiture included a substantial part of the Carcara oil discovery, said to be one of the largest in the world in recent years. Meanwhile, last week Anglo-Dutch global oil and gas operator Royal Dutch Shell plc (NYSE/LSE: RDS-A) chief executive Ben van Beurden indicated at a conference in New York that the company is in the middle of a strategic review of its downstream assets in Argentina, as part of a global $30 billion divestment program. Shell Argentina subsequently clarified in a statement that “in response to the global circumstances of our industry and the objectives behind our combination with BG, we are conducting a strategic review only of our downstream business and assets in the country,” which include its Dock Sud refinery in Buenos Aires, retail gas stations, chemicals, propane gas, aviation and maritime fuels, and lubricants. Shell’s 676 gas stations in Argentina, bring its market share to 19 percent, the second largest after state-owned YPF SA, which has 1430 stations with a 40 percent market share. argentina_gas_stations_mkt-share_sept-2016 “Upstream assets aren’t included in the review as shale investments are a priority for the company. Shell does not want to lose its presence in Argentina, and has a strong commitment to the country,” added Joel Glotzer, a Shell spokesperson in Argentina. Juan Jose Aranguren, Shell’s previous CEO in Argentina for 12 years and an energy industry veteran with nearly four decades of experience, was one of the foremost business critics of former President Christina Kirchner. He was a key adviser of current President Mauricio Macri, and became Argentina’s new Energy Minister, now in the public eye due to electricity and gas rate hikes which the new administration is struggling to implement in the face of strong resistance. The appointment of Teófilo Lacroze as CEO of Shell in Argentina, replacing Aranguren in March, brought about a new era as the company is changing its global business strategy, in the midst of a new local ecosystem and more conducive dialogue and relationships with government authorities. “I see myself more in a scenario where the external relationship with the authorities involves greater dialogue and building the future, with more internal focus on developing the sector, both downstream (products leaving the refinery and reaching the final consumer) in which we want to grow above average, as well as upstream (required for crude exploration and extraction), to move from a pilot stage to production,” Lacroze said earlier this year. Two weeks ago, Marcelo Mindlin, controlling shareholder and president of Pampa Energia (NYSE: PAM), the largest integrated electricity company in Argentina, which bought 67.19 percent of Petrobras Argentina (PESA) in May for $892 million, became PESA’s president. Pampa’s acquisition of PESA included 269 gas stations, a refinery in Bahia Blanca, shares in Transportadora Gas del Sur (TGS), thermal and hydroelectric power plant Genelba Picún Pichi Leufu, several petrochemical plants in Bahia Blanca and Santa Fe, and a series of oil basins. Pampa also controls Transener, the largest network of high voltage transmission in Argentina, and Edenor, the largest electricity distributor in Argentina. Mindlin is a former founding partner of IRSA, and vice chairman of Cresud, APSA (formerly Alto Palermo SA), Dolphin Fund Management and Hoteles Argentinos. In 2012, through their Axion Energy unit, the Argentine Bulgheroni Group‘s Bridas Corp., a joint venture with China’s state owned enterprise CNOOC (China National Offshore Oil Corporation), acquired over 600 Esso service stations from Exxon Mobil, for $800 million. In 2011, Oil Combustibles, controlled by Cristóbal López, acquired a Petrobras refinery in Santa Fe, Argentina, togehgter with 365 gas stations for $110 million. Oil Combustibles is currently in the midst of insolvency procedures (“concurso de acreedores”). “Lower oil prices continue to be a significant challenge across the business, particularly in the Upstream. We are managing the company through the down-cycle by reducing costs, by delivering on lower and more predictable investment levels, executing our asset sales plans and starting up profitable new projects,” Shell’s van Beurden said in late July, after reporting that Shell Q2 earnings plunged 72 percent. At the end of August, after an oil spill in the Gulf of Mexico 97 miles south of Louisiana under investigsation by the U.S. Bureau of Safety and Environmental Enforcement, Shell agreed to sell four Green Canyon offshore blocks, referred to as the Brutus/Glider assets, to EnVen Energy Ventures LLC, for $425 million in cash. Two weeks ago, Compañía de Petróleos de Chile COPEC SA (SNSE: COPEC), one of the largest companies in Chile, agreed to acquire MAPCO Express Inc., with 348 convenience stores, from Delek US Holdings Inc. (NYSE: DK) for $535 million in cash. Delek US is a diversified downstream energy company with assets in petroleum refining, logistics and convenience store retailing. A week earlier, Canadian Alimentation Couche-Tard Inc. (TSX: ATD.A ATD.B), one of the world’s largest company-owned convenience store operators, agreed to acquire San Antonio, Texas-based CST Brands Inc. (NYSE: CST) for $4.4 billion. CST operates over 2,000 locations throughout the Southwestern United States with an important presence in Texas, Georgia, the U.S. Southeast Region, New York and Eastern Canada. CST also controls the general partner of CrossAmerica Partners (NYSE: CAPL), a gas distributor to more than 1,100 locations in the United States. In July, Dallas, Texas-based Alon USA Energy Inc. (NYSE: ALJ), an independent refiner and marketer of petroleum products, retained JPMorgan to explore strategic alternatives including a sale of the company or some of its assets. Alon is the largest 7-Eleven licensee in the United States and operates approximately 300 gas stations and convenience stores in Texas and New Mexico. Alon’s largest shareholder is Delek US Holdings Inc., with a stake of roughly 48% which it acquired from Israel’s Alon Group for $572 million in April 2015. In June, Canada’s largest retailer, Loblaw Cos. Ltd (TSX: L), said it is seeking to sell its “gas bar” operations for CAD $400 million (USD $308 million). Loblaw’s gas station network is one of the largest in Canada, consisting of 212 retail fuel sites with adjacent grocery stores. Photo: Argentine President Mauricio Macri with Marcelo Mindlin, President of Pampa Energy, at World Economic Forum in Davos, in January 2016.]]>

Chilean Copec to Acquire Mapco C-Stores From Delek US $DK for $535M

Chilean Copec to Acquire Mapco C-Stores From Delek US $DK for $535M

Compañía de Petróleos de Chile COPEC SA (SNSE: COPEC) agreed to acquire MAPCO Express Inc. convenience stores from Delek US Holdings Inc. (NYSE: DK) for $535 million in cash. The deal has received unanimous approval of both boards of directors and is expected to close by year-end, subject to customary regulatory and closing conditions. COPEC will be fund the acquisition with cash on hand. Debt associated with the MAPCO retail assets, amounting to approximately $160 million at June 30, 2016, will be repaid at closing. As part of the deal, Delek will continue to supply fuel to certain MAPCO retail locations under an 18-month supply agreement. MAPCO is a leading convenience store chain with 348 corporate stores operating primarily in Tennessee, Alabama and Georgia, with an additional presence in Arkansas, Virginia, Kentucky and Mississippi. MAPCO operates company stores under the banners MAPCO Express, MAPCO Mart, East Coast, Fast Food and Fuel, Favorite Markets, Delta Express and Discount Food Mart. In addition, MAPCO provides fuel to 142 dealer locations as of July 31, 2016, and provides logistical fuel transportation to MAPCO and third parties with approximately 50 tractors and trailers. COPEC is expected to retain MAPCO’s current retail team to provide for a seamless entrance into the U.S. convenience store market. The deal comes a week after Canadian Alimentation Couche-Tard Inc. (TSX: ATD.A ATD.B), one of the world’s largest company-owned convenience store operators, agreed to acquire San Antonio, Texas-based CST Brands Inc. (NYSE: CST) for $4.4 billion. CST operates over 2,000 locations throughout the Southwestern United States with an important presence in Texas, Georgia, the U.S. Southeast Region, New York and Eastern Canada. CST also controls the general partner of CrossAmerica Partners (NYSE: CAPL), a gas distributor to more than 1,100 locations in the United States. COPEC is one of the largest companies in Chile, operating in fuel and lubricants distribution and convenience stores. The company has an existing presence in the convenience stores market, with the largest convenience store network in Chile and 53% of the Chilean gasoline market share, with 626 company and dealer operated service stations, 82 Pronto-branded convenience stores and 220 Punto-branded convenience stores. COPEC is an industry innovator with Pagoclick (mobile pay), Zervo (self-serve fueling dispenser) and leading convenience store developer with multiple formats for urban, suburban and highway locations. In addition, COPEC has a 58.9% ownership stake in Bogota, Colombia-based Organizacion Terpel SA (BVC: TERPEL), which accounts for approximately 45% of Colombia’s fuel market share. Terpel has 1,949 Terpel-branded gas stations in Colombia and 233 stores in Panama, Ecuador, Peru and Mexico under store brands Altoque and Deuna selling Terpel-branded fuel. COPEC was founded in 1934 and is headquartered in Santiago, Chile. Through its subsidiary Celulosa Arauco, it has a commercial presence in over 80 countries, with production facilities in Chile, Argentina, Brazil, Canada, the United States and Uruguay. AntarChile SA (SNSE: ANTARCHILE) has a 60% controlling stake in COPEC. “The acquisition of MAPCO represents an important step for COPEC’s entry into the U.S. convenience store market, which has been identified as a key strategic growth opportunity,” said COPEC CEO Lorenzo Gamuri. “MAPCO’s assets are located in a geographic zone with interesting demographic attributes and with the size for a proper competitive operation in the US market.” “After buying into the control of Organización Terpel in 2010, this is the second significant step to transform Copec into a broader company in the fuel retail and convenience store market,” added Gamuri. “The sale of MAPCO to COPEC allows Delek to simultaneously unlock the value of these assets and gain a continuing competitive partner in retail fuel sales,” said Delek chairman, president, and chief executive Uzi Yemin. Delek’s exclusive financial advisor was RBC Capital Markets LLC. COPEC’s financial advisor was Raymond James & Associates Inc. and legal advisor was Simpson Thacher & Bartlett LLP. Delek US is a diversified downstream energy company with assets in petroleum refining, logistics and convenience store retailing. The refining segment consists of refineries operated in Tyler, Texas, and El Dorado, Arkansas, with a combined nameplate production capacity of 155,000 barrels per day. Delek US also owns 62 percent of Delek Logistics Partners LP (NYSE: DKL), focused on midstream energy infrastructure assets. Delek US also owns 48 percent of Alon USA Energy Inc. (NYSE: ALJ). Delek US is headquartered in Brentwood, Tennessee and employs more than 4,000 people across the eight states. Delek Group owns a stake of nearly 8 percent in Delek US, which has a market capitalization of $1.08 billion. The Delek Group (TASE: DLEKG) (OTCQX: DGRLY), controlled by Israeli billionaire Isaac Tshuva, is a dominant integrated energy company in Israel, and a pioneering leader of the natural gas exploration and production activities that are transforming the Eastern Mediterranean’s Levant Basin into one of the energy industry’s most promising emerging regions. Having discovered Tamar and Leviathan, two of the world’s largest natural gas finds since 2000, Delek and its partners are now developing a balanced, world-class portfolio of exploration, development and production assets with total gross natural gas resources discovered since 2009 of approximately 37 TCF. In addition, Delek Group has a number of assets in downstream energy, water desalination, and the finance sector. The company has a market capitalization of $2.37 billion.]]>