Holly Corporation (HOC) and Frontier Oil Corporation (FTO) announced a merger-of-equals today, which will create a new company with an enterprise value of $7 billion. They companies said their boards of directors have approved a combination in an all-stock transaction. The new company will be known as HollyFrontier Corporation, and will be the most profitable independent refiner in the U.S. on a per barrel basis, the companies said.
The company will be headquartered in Dallas, Holly’s current headquarters locations, and Frontier president and CEO will serve as president and CEO of the new company. Matt Clifton, Holly Chairman and CEO, will serve as executive chairman of the new company. Frontier shareholders will receive 0.4811 Holly shares for each share of Frontier common stock. Upon the close of the transaction, expected early in the third quarter, Holly shareholders will own 51% of the company, and Frontier shareholders will own 49%.
Frontier Oil shares are trading lower by 1.6% on Tuesday, while Holly shares trade lower by 0.4%.
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