Sinclair Oil Corporation to Combine Refining and Logistics Assets and Related
SALT LAKE CITY–(BUSINESS WIRE)–The Sinclair Companies, a privately held company that wholly owns Sinclair Oil Corporation, today announced that it has entered into definitive agreements to combine substantially all of Sinclair Oil’s refining, renewable diesel, and logistics assets with those of HollyFrontier Corporation (NYSE:HFC) (“HollyFrontier”) and Holly Energy Partners, L.P. (NYSE:HEP) (“HEP”), a HollyFrontier-affiliated midstream master limited partnership. As part of the transaction, HollyFrontier will form a new parent company called “HF Sinclair Corporation” (“HF Sinclair”), which will replace HollyFrontier as the public company trading on the NYSE.
Under the agreements, Sinclair Oil’s branded marketing business and all related commercial activities and its refineries and related operations and assets in Casper and Sinclair, Wyoming, will combine with HollyFrontier. Sinclair Oil’s logistics and storage assets, including approximately 1,200 miles of pipelines, two crude oil terminals and eight light product terminals, will combine with HEP. It is expected that the vast majority of Sinclair Oil employees will be invited to continue in their positions following the combination. The transaction does not include exploration and production assets owned by Sinclair Oil & Gas Company.
The Sinclair Companies has great confidence in the merits of this transaction and is enthusiastic about the future of HF Sinclair. The Sinclair Companies will receive approximately 60.2 million shares of HF Sinclair common stock and 21 million HEP common units, equating to ownership of approximately 26.75% of HF Sinclair and 16.6% of HEP following the closing of the transaction. Upon completion of the transaction, The Sinclair Companies will have the right to nominate two representatives to the HF Sinclair Board of Directors and one representative to the HEP Board of Directors at the closing.
“As the oil and gas industry has evolved in recent years, we have carefully considered how best to position Sinclair Oil’s refinery and logistics assets and their related operations for the future,” said Ross Matthews, Sinclair Oil Chairman and Chief Executive Officer. “We’re confident these businesses—and the dedicated employees who operate them—will continue to thrive under this new ownership structure. We expect these businesses will benefit significantly from HollyFrontier’s and HEP’s operational expertise, their network of refineries and midstream assets in the Western U.S., and the flexibilities that come with being part of a larger organization. Sinclair Oil’s employees bring a wealth of talent and capability, including in the production of renewable diesel, which will be an important and growing line of business for HF Sinclair. Sinclair Oil also adds to HF Sinclair an outstanding and extremely successful brand marketing team. The transaction will help accelerate the ongoing rapid expansion of our Sinclair Oil-branded retail sites and the iconic DINO brand.”
“We also believe that HollyFrontier and HEP are an excellent cultural fit, with a shared commitment to integrity and respect for our employees, our communities and the environment,” Mr. Matthews explained. “We anticipate a seamless transition for our employees, distributors and other stakeholders following the closing of the transaction.”
Carol Holding, Chairman of The Sinclair Companies, added, “My husband, Earl, and I have always known that employees are the key to our Company’s success. I am grateful for the efforts of each of the people who have worked alongside of us. Together, we have dreamed impossible dreams and many came true. Combining our strong and healthy oil business with this great team at HollyFrontier and HEP is our way of providing continued growth and new opportunities for our employees. I am proud of the reputation we have for hard work, honesty and integrity. I know these will be important…