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SAN ANTONIO -- In a deal that will net $333 million and earn-out provision in excess of $100 million, Valero Energy Corp. announced today that it will sell its 85,000 barrel-per-day refinery in Krotz Springs, La., to Alon USA Energy Inc.
"The Krotz Springs refinery is a good fit for Alon, and this transaction is a good deal for Valero's stockholders," Bill Klesse, Valero's chairman and chief executive officer said in a released statement.
With official approval from both companies' boards of directors, and less regulatory approvals, the sale is expected to be finalized in July 2008. In a released statement, a company spokesperson said that the transaction will include working capital at the refinery, which will be valued at market prices at closing.
"This transaction is consistent with our strategy to concentrate on our core refineries where we see higher returns for the long run. Alon is a high-quality company that will benefit the great group of dedicated employees at this refinery as well as the community of Krotz Springs," Kleese said in a released statement.
The news comes on the heels of Valero announcement earlier this year regarding its intention to explore strategic alternatives for the Krotz Springs refinery. The initiative includes exploring options for its refineries in Aruba, Memphis, Tennessee and Ardmore, Okla.