A Texas oil company said Monday it is buying Scottsdale-based gas refiner and retailer Giant Industries for an estimated $1.5 billion in cash and debt assumption.
El Paso-based Western Refining is offering Giant shareholders $83 per share, a premium of more than 15 percent over Friday’s closing price.
The merger would create the fourth largest publicly traded independent refiner and marketer in the country with a combined annual earnings topping $551 million and a total crude oil capacity throughput of 216,000 barrels per day.
Giant stock soared nearly 10 percent early today when the market opened.
The proposed purchase has been approved by the boards of both companies. Giant shareholders and federal regulators still have to OK the deal. It is expected to close in fourth quarter.
Giant isn’t anticipating any big hurdles, company spokesman Mark Cox said.
“We think this is a good transaction,” he said. “It is a good deal fro shareholders and the two companies have a good fit.” There is little market overlap, Cox said.
The merger would create the fourth largest publicly traded independent refiner and marketer in the country with a combined annual income topping $551 million and a total crude oil capacity throughput of 216,000 barrels per day.
Western said it will keep an operation in Scottsdale, but will “consolidate overlapping functions.” The Texas company said, however, in a statement announcing the merger, that “significant workforce reductions are not expected.”
Giant has about 125 employees at its corporate offices, including all administrative functions such as accounting, human resources, retail management, refining management and corporate officers, Cox said. The company employs about 3,000 nationwide at its refining and retail operations, including “a couple hundred” people at its subsidiary Phoenix Fuel, he said.
No date has been set for the Giant shareholders vote, Cox said.