Deal will also re­sult in takeover of largest US re­fin­ery

New Straits Times - - Business World -

SAUDI Ara­bian Oil Co (Aramco) will pay Royal Dutch Shell US$2.2 bil­lion (RM9.8 bil­lion) in­clud­ing debt to fi­nalise the breakup of a 19-year re­fin­ing part­ner­ship known as Mo­tiva En­ter­prises LLC.

Aramco’s Saudi Re­fin­ing unit will take full own­er­ship of the Mo­tiva En­ter­prises name and le­gal en­tity, in­clud­ing the largest re­fin­ery in the United States at Port Arthur in Texas, and 24 dis­tri­bu­tion ter­mi­nals, ac­cord­ing to a joint state­ment on Mon­day.

Shell will take sole own­er­ship of the Norco and Con­vent re­finer­ies in Louisiana and 11 dis­tri­bu­tion ter­mi­nals.

Aramco will make a US$2.2 bil­lion bal­anc­ing pay­ment, sub­ject to ad­just­ments in­clud­ing work­ing cap­i­tal. The pay­ment is split be­tween debt and cash. Aramco will as­sume nearly all of Mo­tiva’s US$3.2 bil­lion of net debt, in­clud­ing US$1.5 bil­lion of Shell’s share.

A cash pay­ment would cover the bal­ance, said Shell in a sep­a­rate state­ment.

“Mo­tiva is a strong com­peti­tor among US re­fin­ers, and we value this im­por­tant link with the dy­namic US en­ergy sec­tor,” said Ab­du­laziz Al-Ju­daimi, se­nior vice-pres­i­dent of down­stream at Aramco, in the joint state­ment.

The trans­ac­tion was sub­ject to reg­u­la­tory ap­proval and ex­pected to close in the sec­ond quar­ter of this year, said the com­pa­nies.

Un­der the agree­ment, Mo­tiva will have the right to sell Shell­branded petrol and diesel in Ge­or­gia, North Carolina, South Carolina, Vir­ginia, Mary­land and Wash­ing­ton, as well as the eastern half of Texas and most of Florida.

Shell’s mar­kets will be Alabama, Mis­sis­sippi, Ten­nessee, Louisiana, the Florida pan­han­dle, and the North­east­ern re­gion of the US.

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