Marathon Petroleum Division Hopes to Raise $345M in IPO

FINDLAY, Ohio -- Marathon Petroleum Corp.'s MPLX LP division has received the necessary federal approvals and will commence an initial public offering (IPO).

On July 3, Marathon Petroleum, parent of Speedway LLC, filed a Form S-1 with the U.S. Securities and Exchange Commission to spin off MPLX.

MPLX owns, operates, develops and acquires crude oil, refined products and other hydrocarbon-based product pipelines and other assets. The company will sell 15 million common units to the general public for between $19 and $21 per unit.

The underwriters of the IPO, UBS Investment Bank, BofA Merrill Lynch, Morgan Stanley, Citigroup and J.P. Morgan, will have a 30-day option to purchase an additional 2.25 million common units. If the underwriters fully exercise that option, MPLX would have raised about $345 million, and the public and the underwriters combined would own a combined 22.9 percent of MPLX.

MPLX will be a master limited partnership (MLP) once it begins trading on the New York Stock Exchange under the symbol MPLX. To qualify for MLP status, a partnership must generate at least 90 percent of its income from what the Internal Revenue Service (IRS) deems "qualifying" sources. Those qualifying sources include activities related to the production, processing or transportation of oil, natural gas and coal.

Speedway will not be part of the IPO and will remain under the parent company's umbrella.