HollyFrontier buys most Sinclair Oil assets in part to boost renewables portfolio

August 3, 2021 |

In Texas, HollyFrontier Corporation and Holly Energy Partners, L.P have entered into definitive agreements under which HollyFrontier and HEP will acquire Sinclair Oil Corporation and Sinclair Transportation Company from The Sinclair Companies.

Under the terms of HollyFrontier’s definitive agreement, HollyFrontier will acquire Sinclair’s:

  • Branded marketing business and all commercial activities, which build on an iconic brand with exceptional customer loyalty;
  • Renewable diesel business, which made Sinclair a first-mover in the space; and
  • Two premier Rocky Mountain-based refineries.

As part of the transaction, HollyFrontier will form a new parent company, named “HF Sinclair Corporation”, which will replace HollyFrontier as the public company trading on the NYSE. At the closing, existing shares of HollyFrontier will automatically convert on a one-for-one basis into shares of common stock of HF Sinclair, and HF Sinclair will issue approximately 60.2 million shares of common stock to Sinclair, representing 26.75% of the pro forma equity of HF Sinclair with a transaction value of approximately $1.8 billion based on HollyFrontier’s fully diluted shares of common stock outstanding and closing stock price on July 30, 2021. HollyFrontier expects to seek the approval of its stockholders under applicable rules of the New York Stock Exchange for the issuance of the HF Sinclair shares to Sinclair.

HollyFrontier’s acquisition of Sinclair’s branded marketing business, refineries and its renewable diesel business is expected to increase the Size and Scale of HollyFrontier’s Renewables Business. Sinclair’s renewable diesel unit (“RDU”), co-located at its Sinclair, Wyoming refinery, processes soybean oil and tallow into renewable diesel that is sold into California. The RDU has recently been expanded to produce 10,000 barrels per day and Sinclair is currently in the process of constructing a pre-treatment unit, allowing for further feedstock advantage and flexibility. Once the transaction is complete, the combined renewables business is expected to produce approximately 380 million gallons of renewable diesel per year and will be a leading renewable diesel producer in the U.S. with the size and scale to support logistical, procurement, feedstock and operational synergies.

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Category: Fuels

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