Marathon Oil to sell assets to two PE firms

Marathon Oil Corp has agreed to sell most of its refining and marketing assets in Minnesota to ACON Investments and TPG Capital. The two private equity firms will buy the St. Paul Park refinery (which produces 74,000 barrels per day), 166 SuperAmerica convenience stores, interests in pipeline assets in Minnesota and associated inventories for about $900 million.

(Reuters) – Marathon Oil Corp said on Wednesday it agreed to sell most of its refining and marketing assets in Minnesota to two private equity firms for about $900 million.
It had signed a letter of intent to do the deal in May.

Marathon is working to streamline operations during a period of weak profit margins at refineries.

Marathon said ACON Investments and TPG Capital will buy the assets, which include the 74,000 barrel per day St. Paul Park refinery, 166 SuperAmerica convenience stores, interests in pipeline assets in Minnesota and associated inventories.

When the companies signed the letter of intent, a third private equity firm — NTR Partners — had also been a buyer. That firm is no longer included in the deal.

The $900 million deal value includes about $80 million in preferred stock in Northern Tier Energy, a company the private equity firms formed to operate the assets, Marathon said. It also includes about $300 million for the inventories at the assets.

The deal also includes a provision under which Marathon could receive up to $125 million over eight years or pay back up to $60 million over two years as “margin support,” depending on how the assets perform.

(Reporting by Michael Erman, editing by Gerald E. McCormick)