Tesoro Corp. has received permission from antitrust regulators to purchase southern California BP refinery for more than $2 billion.
The Federal Trade Commission, which controls business regulation regarding antitrust law, has approved the deal because of the projected reduction in cost of producing California-grade gasoline. The demand for California gas has steadily declined in the past few years and is predicted to decline further in the next decade. The FTC felt that combining the two refineries would create a more efficient method of producing California-grade gasoline.
The deal was approved without a requirement for asset sales. The FTC also stated that the number of major refiners supplying the West Coast would not change as a result of the sale. The deal must now be approved by the California Attorney General. The Attorney General has made no comment on the proposed sale and there is no indication of her possible approval or disapproval of the plan.
Tesoro, the second-largest refiner in the state, will now control a crude oil throughput equal to 26 percent of the state's capacity. The sale also includes 800 retail stations as well as storage and distribution assets. BP's refineries will now be confined to the northern continental United States where the company can obtain cheaper Canadian crude oil.
Whether a business deal involves billions of dollars or much less money, all business owners who are considering sales may benefit from sound legal advice. A business attorney may be able to assist business owners in making decisions about possible purchases or sales of assets as well as drawing up the proper legal documentation such as contracts and sales agreements to help the transaction happen smoothly.
Source: Fox Business, "Tesoro wins U.S. antitrust OK to buy California BP refinery ", Diane Bartz and Erwin Seba, May 17, 2013