Marathon Petroleum Corp. will sell to MPLX about $8.1 billion in refining and logistics assets and fuels distribution services, Marathon and MPLX reported.
The deal is expected to close on Feb. 1, 2018.
The assets and services are projected to generate annual earnings before interest, taxes, depreciation and amortization (EBITDA) of $1 billion, the companies reported.
In return for the assets Marathon Petroleum will receive $4.1 billion in cash and MPLX equity valued at about $4 billion. The equity will consist of 111.6 million MPLX common (limited partner) units and 2.3 million general partner units to maintain Marathon’s 2 percent general partner interest in MPLX.
“We are very pleased to have reached agreement on the terms for the remaining dropdown to MPLX outlined in our strategic actions,” said Gary R. Heminger, chairman and chief executive officer of both Marathon Petroleum and MPLX. “The addition of these high-quality, fee-based revenue streams to MPLX further diversifies the partnership’s earnings and contributes substantially to the distributable cash flow base of the partnership.”