HollyFrontier to acquire Sinclair Oil, create new parent company
Updated: Sep 9, 2021
The Sinclair Companies, a privately held company that wholly owns Sinclair Oil Corp., announced that it has entered into definitive agreements to combine substantially all of Sinclair Oil’s refining, renewable diesel, and logistics assets with those of HollyFrontier Corp. and Holly Energy Partners. As part of the transaction, HollyFrontier will form a new parent company, HF Sinclair Corp., which will replace HollyFrontier as the public company trading on the New York Stock Exchange.
Under the agreements, Sinclair Oil’s branded marketing business and all related commercial activities and its refineries and related operations and assets in Casper and Sinclair, Wyoming, will combine with HollyFrontier. Sinclair Oil’s logistics and storage assets, including approximately 1,200 miles of pipelines, two crude oil terminals and eight light product terminals, will combine with HEP. It is expected that the vast majority of Sinclair Oil employees will be invited to continue in their positions following the combination. The transaction does not include exploration and production assets owned by Sinclair Oil & Gas Co.
The Sinclair Companies will receive approximately 60.2 million shares of HF Sinclair common stock and 21 million HEP common units, equating to ownership of approximately 26.75 percent of HF Sinclair and 16.6 percent of HEP following the closing of the transaction. Upon completion, The Sinclair Companies will have the right to nominate two representatives to the HF Sinclair board of directors and one representative to the HEP board of directors at the closing.
“As the oil and gas industry has evolved in recent years, we have carefully considered how best to position Sinclair Oil’s refinery and logistics assets and their related operations for the future,” said Ross Matthews, chairman and CEO of Sinclair Oil. “We’re confident these businesses—and the dedicated employees who operate them—will continue to thrive under this new ownership structure. We expect these businesses will benefit significantly from HollyFrontier’s and HEP’s operational expertise, their network of refineries and midstream assets in the Western U.S., and the flexibilities that come with being part of a larger organization. Sinclair Oil’s employees bring a wealth of talent and capability, including in the production of renewable diesel, which will be an important and growing line of business for HF Sinclair. Sinclair Oil also adds to HF Sinclair an outstanding and extremely successful brand marketing team. The transaction will help accelerate the ongoing rapid expansion of our Sinclair Oil-branded retail sites and the iconic DINO brand. … Sinclair Oil is deeply proud of the role it has played—since 1916—in growing the U.S. energy sector, fueling our country’s economy and providing outstanding domestic manufacturing jobs for the American people. The Sinclair Companies and its ownership are so pleased to be continuing in these traditions as part of HF Sinclair.”
Sinclair Oil has been producing renewable diesel through a subsidiary, Wyoming Renewable Diesel Co., since early 2018.
The transaction is expected to close mid-2022.