WASHINGTON (dpa-AFX) - HollyFrontier Corp. (HFC) and Holly Energy Partners, L.P. (HEP) have agreed to acquire Sinclair Oil Corporation and Sinclair Transportation Company from The Sinclair Companies. This will result in a new parent company, named HF Sinclair Corporation, which will replace HollyFrontier as the public company trading on the NYSE. HollyFrontier's current senior management team will operate the new company. HEP will continue to operate under the name Holly Energy Partners, L.P.
HollyFrontier will acquire Sinclair's: branded marketing business and all commercial activities; renewable diesel business; and two premier Rocky Mountain-based refineries. As part of the deal, existing shares of HollyFrontier will convert on a one-for-one basis into shares of HF Sinclair. HF Sinclair will issue approximately 60.2 million shares of common stock to Sinclair, representing 26.75% of the pro forma equity of HF Sinclair with a transaction value of approximately $1.8 billion.
HEP will acquire Sinclair's integrated crude and refined products pipelines and terminal assets. Also, HEP will acquire Sinclair's interests in three pipeline joint ventures including: Powder Flats Pipeline, Pioneer Pipeline and UNEV Pipeline. The purchase price will consist of an equity issuance of 21 million HEP common units and the payment of $325 million of cash, representing a deal value of approximately $758 million.
The deal is projected to be accretive to HF Sinclair's earnings, cash flow and free cash flow within the first full year, and to enable the combined company to increase return cash to stockholders.
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