Valero to buy Houston refinery site from LyondellBasell for $320.5 million
Valero Energy Corp. said a subsidiary agreed on Oct. 29 to buy LYB Houston Hub Holdings for $320.5 million, subject to closing adjustments, with closing expected by the end of 2026.
Key takeaways
- Valero Energy Corp. (VLO) said Oct. 30 a subsidiary agreed Oct. 29 to acquire LYB Houston Hub Holdings LLC from a LyondellBasell Industries N.V. subsidiary for $320.5 million, subject to closing adjustments. LYB Houston indirectly owns a facility of about 700 acres adjacent to Valero's Houston refinery on the Houston Ship Channel.
Valero Energy Corp. (VLO) said on Oct. 30 it will buy a facility of about 700 acres next to its Houston refinery on the Houston Ship Channel in Texas. The site operated as a petroleum refinery.
Shares rose 2.2% in regular-session trading as of 9:35 a.m. ET, from a regular-session close of $384.57.
The deal is priced at $320.5 million, subject to closing adjustments, the company said in an 8-K filing.
Valero Refining-Texas, L.P., a wholly owned subsidiary, agreed on Oct. 29 to acquire all outstanding equity interests in LYB Houston Hub Holdings LLC, or LYB Houston, from a subsidiary of LyondellBasell Industries N.V.
LYB Houston indirectly owns the facility. Valero operates 14 petroleum refineries located in the U.S., Canada and the U.K., with a combined throughput capacity of approximately 3.0 million barrels per day, according to the company's release.
Closing is subject to customary conditions. These include the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
The company expects the transaction to close by the end of 2026.
Valero said it currently expects to restart 165,000 barrels per day of light sweet crude processing capacity at the site by year-end 2027.
The acquisition also gives the company the opportunity to invest later in high-complexity, heavy sour crude processing, the company said.
Chairman, CEO and President Lane Riggs said the deal is a unique opportunity. "This acquisition is a unique opportunity to strategically expand Valero's U.S. Gulf Coast footprint at a fraction of replacement value and enhance the long-term strength of our refining system," Riggs said.
Riggs also said the acquisition "is expected to provide a compelling financial return, consistent with Valero's disciplined capital allocation framework."
The company said it has prepared a presentation on the transaction. It will be posted on the company's investor relations website and furnished as an exhibit to the 8-K.
The filing does not give a cost estimate for the restart.