Phillips buys Tosco, becoming second largest domestic refiner

Petroleum News Alaska

Phillips Petroleum Co. said Feb. 4 that it is buying Tosco Corp. in a $7 billion stock transaction. Tosco is the largest domestic independent oil refiner and marketer of petroleum products, with 1 million barrels a day of refining capacity on the East Coast and 350,000 barrels per day on the West Coast.

Phillips will acquire all of Tosco’s operations, including eight U.S. refineries with a total capacity of 1.35 million barrels per day and 6,400 retail outlets in 32 states. Phillips currently has three U.S. refineries with a total capacity of 360,000 barrels per day, more than 6,000 retail and aviation outlets in 28 states, and 6,000 miles of pipeline. The combined company will be the second largest refiner in the United States and third largest marketer, retailing nationwide under the Phillips 66, the ‘76, and Circle K brands.

Phillips will issue 0.8 Phillips shares for each Tosco share and will also assume approximately $2 billion of Tosco’s debt. The transaction is expected to close by the end of the third quarter of 2001. Phillips’ board of directors also has authorized a $1 billion share buyback program.