Business models to morph after this merger?

One of the biggest refiners in the country is expected to soon gobble up a smaller competitor to create a behemoth with operations stretching from the West Coast to the East Coast, Alaska to Texas and even into Mexico. What it will mean for the rest of the refining industry is yet to be determined.

The pending $23.3 billion merger of the nation’s secondlargest refiner, Marathon Petroleum of Findlay, Ohio, with the No. 5 refiner, Andeavor of San Antonio, will make the combined company the largest U.S. refining operation, with nearly 3 million barrels a day of refining capacity and thousands of miles of pipelines. The new company, which will operate under the Marathon Petroleum name, will run 16 refineries and have nearly 12,000 company-owned and branded gas stations across most of the United States. Three of Andeavor’s top executives, including CEO Gregory Goff, will join Marathon Petroleum’s leadership team.

The combined company is expected to gain $1 billion in efficiencies — usually a euphemism for cost cutting that involves layoffs. The companies have not commented on what the combination will mean for employment levels.

The two companies have each pursued export opportunities into Mexico and the combined refiner will be able to supply both the western and eastern coasts of Mexico. Andeavor has embarked on a plan to dominate fuel distribution in northwestern Mexico, with multiple pipeline and storage deals secured with Mexico’s state-owned energy company, Petróleos Mexicanos, or Pemex. Andeavor also has plans to increase the number of branded stores in the region from around 60 in 2017 to 300 by 2020, according to the company.

Marathon Petroleum Corp. already supplies Mexico’s east-