How will competitors react to refiner merger?

ern coast from its Gulf Coast refineries. Shortly after the merger was announced, Marathon CEO Gary Heminger said the refiner would evaluate further expansion into Mexico.

Votes by shareholders of both companies on the merger will be held Sept. 24; the merger is expected to be completed by Oct. 1.

How the rest of the industry reacts remains to be seen. The largest U.S. refiner, Valero Energy of San Antonio, has not made a big acquisition for years. The last major acquisition was the $730 million purchase in 2011 of Chevron’s refinery in Pembroke, Wales, in the United Kingdom.

Since then, the company has sought to grow its refining and marketing through its own investments while reducing its involvement in nonrefining businesses. In 2013, Valero spun off its retail arm as CST Brands, and its pipeline and storage business as Valero Energy Partners, in which Valero maintains a controlling stake.

In May, Valero signed a deal with San Antonio pipeline and storage company NuStar Energy to export fuels into northern Mexico, and in 2017 the refiner inked an agreement to use a new fuels terminal in the Gulf of Mexico port of Veracruz. These moves have allowed Valero to focus on its core refining business, which includes 13 U.S. refineries that can process a combined 2.2 million barrels of crude day. (Valero also has two refineries in Canada and the U.K., with a combined processing capacity of 900,000 barrels a day.)

The redrawing of the U.S. refining map will pit the larger, geographically diverse and fully integrat- ed Marathon Petroleum against the leaner, more focused Valero Energy Corp. Time will tell which business model comes out on top.

William Luther / Staff file photo Andeavor’s corporate headquarters is in San Antonio. The refiner, the fifth-largest in the U.S., is in the process of being acquired by Ohio-based Marathon Petroleum Corp.

Andeavor President and CEO Gregory Goff will join the Marathon team.