MPLX LP Announces Agreement to Acquire Andeavor Logistics LP

• MPLX to acquire ANDX in a unit-for-unit transaction at a 1.07x blended exchange ratio representing a 1% premium to market1

Findlay, Ohio, May 8, 2019 /PRNewswire/ -- Marathon Petroleum Corporation (NYSE: MPC), MPLX LP (NYSE: MPLX), and Andeavor Logistics LP (NYSE: ANDX) today announced that the two midstream companies have entered into a definitive merger agreement whereby MPLX will acquire ANDX in a unit-for-unit transaction at a blended exchange ratio of 1.07x. This represents an equity value of approximately $9 billion and an enterprise value of $14 billion for the acquired entity. The transaction has been unanimously approved by MPLX's and ANDX's respective Conflicts Committees and both Boards of Directors. Subject to the satisfaction of customary closing conditions and receipt of regulatory approvals, the transaction is expected to close in the second half of 2019.

Under the terms of the merger agreement, ANDX public unitholders will receive 1.135x MPLX common units for each ANDX common unit held, representing a premium of 7.3%, and MPC will receive 1.0328x MPLX common units for each ANDX common unit held, representing a 2.4% discount. The blended exchange ratio of 1.07x represents a 1% premium to market*.

"This transaction simplifies our MLPs into a single listed entity and creates a leading, large-scale, diversified midstream company anchored by fee-based cash flows," said Gary R. Heminger, chairman and chief executive officer. "This transaction is projected to be immediately accretive to MPLX unitholders on distributable cash flow, demonstrating MPC's commitment to positioning its midstream business for long-term success. The combined entity will have an expanded geographic footprint which we believe enhances our long-term growth opportunities and the sustainable cash flow profile of the business. We are confident about the midstream growth and value-creation opportunities that exist across this combined platform in the best basins in the U.S."

Mike Hennigan will remain President of the combined entity and lead all midstream activities.

Strategic Rationale

• Enhances prospects for full midstream value-chain capture: This combination enhances commercial opportunities building on MPLX's strong footprint in the Marcellus and deepening the presence in the Permian. MPLX's focus will continue to be providing services with stable, fee-based cash flows, expanding export capabilities, and leveraging existing assets for third-party business.
• Creates opportunities to high-grade and enhance returns on project backlog: The broader footprint enhances the ability to combine commercial efforts and selectively deploy capital towards the highest return projects with strategic importance.
• Improves financial profile: MPLX is committed to self-funding the equity portion of its capital investments and enhancing distribution coverage throughout 2019 and 2020. The company remains committed to maintaining its investment grade credit profile and views its increased size, scale, and diversification of fee-based cash flows as credit enhancing attributes.

Approvals and Timing

The transaction has been unanimously approved by MPLX's and ANDX's respective Conflicts Committees and both Boards of Directors. As part of the transaction, ANDX's General Partner and an MPC subsidiary, together representing approximately 64% of ANDX's common units, have entered into a support agreement pursuant to which those entities have agreed to deliver written consents approving the transaction. ANDX expects to maintain its current distribution level through close. The transaction is expected to close in the second half of 2019, subject to customary closing conditions.
 

Investor Presentation, Conference Call, Webcast

MPLX and ANDX will hold a conference call and webcast at 8:30 a.m. EDT today to discuss the transaction. Interested parties may listen to the conference call by dialing 1-888-455-2707 (confirmation number 2634753) or by visiting MPLX's website at http://www.mplx.com and clicking on the "Events and Presentations" link in the "Investor Center" tab or ANDX's website at http://www.andeavorlogistics.com and clicking on the "Events and Presentations" link in the "Investor" tab. A replay of the webcast will be available on MPLX's and ANDX's websites for two weeks. An investor presentation will also be available online prior to the conference call and webcast at http://ir.mplx.com and http://ir.andeavorlogistics.com.
 

MPLX and ANDX First-Quarter 2019 Earnings Announcements

MPLX and ANDX also issued their respective first-quarter 2019 financial results this morning. Management will be available to answer questions about the earnings releases on today's conference call. MPLX's and ANDX's previously announced first-quarter 2019 earnings conference calls and webcasts, which had been scheduled for Wednesday, May 8, at 11 a.m. EDT and 1 p.m EDT, respectively, have been canceled.

Advisors

In connection with the transaction, Barclays acted as an exclusive financial advisor and Jones Day acted as legal advisor to MPC, Jefferies LLC acted as financial advisor and Latham & Watkins LLP acted as legal advisor to the Conflicts Committee of MPLX, and Goldman, Sachs & Co. LLC acted as exclusive financial advisor and Sidley Austin LLP acted as legal advisor to the Conflicts Committee of ANDX.

About Marathon Petroleum Corporation

Marathon Petroleum Corporation (MPC) is a leading, integrated, downstream energy company headquartered in Findlay, Ohio. The company operates the nation's largest refining system with more than 3.0 million barrels per day of crude oil capacity across sixteen refineries. MPC's marketing system includes branded locations across the United States, including Marathon brand retail outlets. Speedway LLC, an MPC subsidiary, owns and operates retail convenience stores across the United States. MPC also owns the general partner and majority limited partner interests in two midstream companies, MPLX LP and Andeavor Logistics LP, which own and operate gathering, processing, and fractionation assets, as well as crude oil and light product transportation and logistics infrastructure. More information is available at www.marathonpetroleum.com.

About MPLX LP

MPLX is a diversified, large-cap master limited partnership that owns and operates midstream energy infrastructure and logistics assets, and provides fuels distribution services. MPLX's assets include a network of crude oil and refined product pipelines; an inland marine business; light-product terminals; storage caverns; refinery tanks, docks, loading racks, and associated piping; and crude and light-product marine terminals. The company also owns crude oil and natural gas gathering systems and pipelines as well as natural gas and NGL processing and fractionation facilities in key U.S. supply basins. More information is available at www.MPLX.com

About Andeavor Logistics LP

Andeavor Logistics LP is a fee-based, full-service, diversified midstream logistics company, with integrated assets across the western and mid-continent regions of the United States. Andeavor Logistics operates through three business segments: Terminalling and Transportation, Gathering and Processing and Wholesale. The Terminalling and Transportation segment consists of marine terminals, refined product truck terminals, rail terminals, dedicated storage facilities and transportation pipelines. The Gathering and Processing segment consists of crude oil gathering systems and pipelines as well as natural gas gathering pipelines, processing facilities and fractionation facilities. The Wholesale segment consists of a fee-based fuel wholesale business. Andeavor Logistics is a Delaware limited partnership headquartered in Findlay, Ohio.

*Based on May 2, 2019 closing prices

Investor Relations Contacts:

Kristina Kazarian – Vice President, Investor Relations, (419) 421-2071

Doug Wendt – Manager, Investor Relations, (419) 421-2423

Evan Barbosa – Manager, Investor Relations, (419) 421-2539

Jim Clarke – Manager, Investor Relations, (419) 421-4165

Media Contacts:

Chuck Rice – Director, Communications and Corporate Affairs, (419) 421-2521

Source MPLX LP; Andeavor Logistics LP

Web Site: http://www.andeavorlogistics.com