PHOENIX — Two energy companies with Arizona ties and their own refineries and networks of gasoline station/convenience stores are proceeding on a merger path that seems likely to be completed in coming months.
Western Refining, which operates two refineries and a retail network focused in Southwestern states, is seeking to buy the units of Northern Tier Energy that it doesn’t already own, pending a shareholder vote expected sometime during the first half of 2016.
Tempe-based Northern Tier operates a Minnesota refinery with gasoline stations and convenience stores in Minnesota and Wisconsin. Northern Tier moved its headquarters to Tempe in 2014, after Western Refining took a major stake in the company.
When a definitive merger agreement was announced in December, the deal would have been worth around $1.6 billion. But it now appears closer to $1.4 billion, following a decline of nearly one-third in Western Refining’s share price over the past month, coinciding with stock-market weakness and plunging oil prices.
Northern Tier filed “going private” documents Jan. 19 with the U.S. Securities and Exchange Commission.
The two corporations already are closely related: Western Refining is technically headquartered in El Paso, Texas, where it operates one of its two refineries — the other is in Gallup, N.M. Yet the company’s administrative office is in Tempe, in the same building at 1250 W. Washington St. where Northern Tier has its headquarters and a local staff of roughly 20.
Western Refining’s president and CEO, Jeff Stevens, and most other top executives spend the bulk of their time here, and the company counts around 1,400 Arizona employees, said Gary Hanson, a spokesman for both companies.
Western Refining traces its roots in part to Scottsdale-based Giant Industries, which it acquired a decade ago. Western Refining already owns 38 percent of Northern Tier Energy’s common units and 100 percent of a general-partnership interest in Northern Tier.
Northern Tier shareholders would own roughly 15 percent of Western Refining following the acquisition.
The merger would result in a combined entity owning three profitable independent refineries, with direct pipeline access to crude oil sources and an integrated retail and wholesale distribution network, said Stevens in a statement. “With a simplified corporate structure and diverse geographic base, Western will have greater access to capital and be positioned to profitably grow,” he said.
Western Refining has operations that include gasoline stations and convenience stores in Arizona, Colorado, New Mexico and Texas. Northern Tier owns the SuperAmerica network of gasoline station/convenience stores and sells prepared food under the SuperMom’s brand.
