Delek strikes deal with ALON USA

Lyndel Moody
Staff Writer

Delek US Holdings and Alon USA jointly announced Tuesday the two had come to a definitive agreement which will allow Delek to acquire the rest of Alon’s common stock it did not already own in an all-stock transition.
The deal will combine the two companies into one larger oil/gas business finishing a process started in 2015 when it was announced Delek US had acquired 48 percent outstanding shares of Alon USA.
In an phone interview with the Herald Tuesday, Keith Johnson, Delek vice president and investor relations, said its too early to tell what changes will come to the assets to be acquired once the deal is finalized. Those assets includes the Big Spring refinery and nearly 300 7-11 stations and convenience stores in Central and West Texas and New Mexico.
“We haven’t put any long term plans out there because we haven’t closed the transaction,” Johnson said. “Of course Big Spring, from what I understand, is a great refinery and in a great location to the Permian Basin, but from our stand point we haven’t put any specific long-term plans out on any of the assets.”
He added the acquisitions will increase the company's footprint in the Permian Basin.
“From our stand point of a larger refinery company, currently Delek has two refineries and once we have the full combination with Alon that will give us four one being in Big Spring there,” Johnson said. “We also have one in Tyler, Texas which uses Permian crude. We have one in El Dorado, Arkansas which uses Permian crude as well. Of course Alon has one down in Krotz Springs, Louisiana that has some Permian access so Permian is a big piece of our all combined company and makes it a large piece of our crude slate and also a big piece of our overall focus. With the assets we will have through this combination, we will have a good footprint in the Permian.”
The combined companies will create “a Permian focus company with refining, logistics, retail and marketing operations with a combined enterprise value of approximately $2.8 billon,” according to a press release from Alon USA.
Delek President and Chief Executive Officer Uzi Yemin stated, "the combination will create a refining system that will be one of the largest buyers of crude from the Permian Basin among the independent refiners."
Johnson said closing is expected in the first half of 2017.