- Strengthens, extends and simplifies the companies' long-time
partnership
- Provides identified cost synergies and a ready platform for
growth
- Enables more efficient use of cash and debt and improves
financial transparency
MAUMEE, Ohio, Oct. 2, 2019 /CNW/ -- The Andersons, Inc.
(Nasdaq: ANDE) today announced that it and Marathon Petroleum
Corporation (NYSE: MPC) have merged four ethanol entities with and
into the new legal entity The Andersons Marathon Holdings LLC
(TAMH). The ethanol facilities involved in the merger include those
in Albion, Mich.; Clymers, Ind.;
and Greenville, Ohio, which were
all perviously jointly owned by The Andersons and Marathon
Petroleum; and The Andersons' wholly-owned ethanol facility in
Denison, Iowa. Effective
October 1, 2019, The Andersons and
Marathon Petroleum own 50.1% and 49.9% of TAMH equity,
respectively. The transaction will result in the consolidation of
TAMH's results in The Andersons' financial statements.
In conjunction with the merger agreement, TAMH has entered into
several new long-term services agreements with The Andersons. Under
those agreements, The Andersons will continue to operate the four
plants, buy corn, market ethanol and other coproducts and manage
risk for TAMH.
The merger will result in a step-up in the book basis of the
Albion, Clymers and Greenville assets and a sizable one-time,
noncash gain to The Andersons in the fourth quarter. The asset
step-up will also result in higher depreciation expense. The
amounts of both the gain and the additional depreciation are still
being determined. In addition, the debt previously held by the
separate entities was refinanced using a new $200 million TAMH credit facility.
"I am excited about the benefits this merger will provide for
our ethanol business," said Pat
Bowe, President and CEO of The Andersons. "It will allow our
commercial teams to trade corn, ethanol and DDGs freely among the
four facilities to achieve optimal profitability, and our
procurement team to leverage the resulting larger purchasing power.
The simplified structure will also make cash management and
borrowing more efficient and improve transparency for investors and
lenders," Bowe continued.
"We have enjoyed and benefited from our partnership with
Marathon Petroleum in the ethanol business since 2006," said
Jim Pirolli, President of The
Andersons Ethanol Group. "In addition to other benefits, TAMH will
provide an excellent platform for future growth," Pirolli
added.
About The Andersons, Inc.
Founded in Maumee, Ohio, in 1947, The Andersons is a
diversified company rooted in agriculture, conducting business
across North America in the grain,
ethanol, plant nutrient and rail sectors. Through its Statement of
Principles, The Andersons strives to provide extraordinary service
to its customers, help its employees improve, support its
communities and increase the value of the company. For additional
information, please visit www.andersonsinc.com.
This release contains forward-looking statements.
Forward-looking statements are information of a non-historical
nature and are subject to risks and uncertainties that are beyond
The Andersons' ability to control. These risks and uncertainties
are described under the caption "Risk Factors" in the company's
2018 Annual Report on Form 10-K filed with the Securities and
Exchange Commission that may be accessed on the company's website.
The company cautions shareholders and prospective investors that
actual results may differ materially from those indicated by the
forward-looking statements.
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SOURCE The Andersons, Inc.