Valero to acquire Huntway Refining

March 20, 2001
Valero Energy Corp., San Antonio, Tex., has agreed to acquire leading California asphalt supplier Huntway Refining Co., Newhall, Calif., in a $78 million transaction. Valero said the acquisition of Huntway's refineries in Benicia and Wilmington will mark its entry into the West Coast asphalt market, one of the largest in the US.


By the OGJ Online Staff


HOUSTON, Mar. 20
�Valero Energy Corp., San Antonio, Tex., has agreed to acquire leading California asphalt supplier Huntway Refining Co., Newhall, Calif., in a $78 million transaction.

Valero said the acquisition of Huntway's refineries in Benicia and Wilmington will mark its entry into the West Coast asphalt market, one of the largest in the US.

The deal has been approved by directors of both companies. It is still subject to approval by creditors and stockholders. The transaction should close by June. Holders of Huntway stock will receive $1.90/share. Valero will also retire outstanding debt and cash out outstanding options.

"This is a very strategic investment for Valero because Huntway's refineries will further diversify our product slate and geographic reach, and the acquisition is also accretive to earnings," said Bill Greehey, Valero's chairman and CEO.

Huntway averaged production of approximately 8,100 b/d of asphalt in 2000, including higher value, polymer-modified asphalts. Its refineries also produced 7,400 b/d of light-end products last year, which were mostly sold to refiners as intermediate feedstocks.

Huntway supplies 25% of asphalt demand in Northern California and 15% in Southern California, said Valero.

Huntway's largest refinery, adjacent to Valero's Benicia refinery, has a throughput capacity of 13,000 b/d. The Wilmington facility near Los Angeles has 6,000 b/d throughput capacity.

"There are significant synergies between the two refineries in Benicia, making this acquisition a great investment for Valero," said Greehey. "We expect to realize real benefits from the additional dock and tankage facilities, as well as operational efficiencies between the two refineries."