Alon USA Energy Inc. (NYSE:ALJ) has bought three refineries in the US for a total of $500 million, the company announced today. Two of the refineries were bought through the acquisition of Paramount Petroleum Corporation, excluding certain real estate assets, for $407 million, of which $307 million is in cash and $100 million in the form of assumption of debt.
The Paramount transaction will include the company's 54,000 barrels per day (bpd) refinery in Paramount, California; a 12,000 barrels per day heavy crude refinery in Portland, Oregon; seven asphalt terminals located in Seattle, Washington, Elk Grove and Mojave, California, Reno, Nevada, and Phoenix, Fredonia, and Flagstaff, Arizona; and a 50% interest in Wright Asphalt Products Company, which specializes in patented tire rubber modified asphalt.
Alon has also agreed to purchase the assets of Edgington Oil Company, a heavy crude refining company located in Long Beach, California, for approximately $52 million in cash plus an amount to be determined for the value of inventory.
"Our IPO in July 2005 was designed to place the Company on a growth path in order to achieve the further integration of our business," said Alon USA chairman David Wiessman. "These two acquisitions will more than double our refining capacity, improve our risk profile as a single refiner and allow us to expand into higher value-added asphalt business. We will continue to pursue well-thought-out growth in the Southwest."
Alon USA also announced today that it was withdrawing from the tender for Oil Refineries Ashdod. The company was a partner with Dor Alon in the tender, but has decided to focus on activity in the US and not to invest in Israel. It is still not known whether Dor Alon will compete in the tender because of the delay in its planned merger with Sonol.
Published by Globes [online], Israel business news - www.globes.co.il - on May 1, 2006
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