The transaction is less likely to face too many regulatory hurdles, thanks to the diverse geographic presence of both companies. Marathon operates largely in the Midwest while Andeavor’s operations are mostly in the western part of the US.
A growth in fuel demand and the shale boom has given a boost to the US refining industry. The new entity will have a production capacity of over 3 million barrels of crude per day. The merger will also be beneficial in terms of logistics capabilities.
Additionally, the combination is expected to benefit going forward from regulations that aim to curb pollution from ships. The demand for clean fuels will benefit Marathon in terms of expansion in refining operations.
Shares of Marathon saw a drop while Andeavor’s stock saw a rise following the news.