CVR Energy Details $4.2B Marathon Refinery Deal, $1.3B Equity Financing and Trafigura Supply Pact

summarizeSummary

CVR Energy disclosed the full financing for its $4.2 billion purchase of Marathon's St. Paul Park and Mandan refineries: $2.5 billion of secured debt plus $1.3 billion of new convertible preferred from Trafigura ($800 million) and IEP (up to $500 million) at $53.37 per share. Trafigura also becomes exclusive crude supplier to both refineries for ten years.

check_boxKey Events · M&A and Partnerships · CVI

• Definitive Deal for Two Marathon Refineries

  CVR will pay a $4.2 billion base cash price for the 105,000 bpd St. Paul Park and 72,000 bpd Mandan refineries, 17% stakes in two pipeline entities and the related marketing business, lifting crude throughput capacity from about 207,000 to about 384,000 barrels per day.

• $1.3B of New Convertible Preferred Equity

  Trafigura buys about 14,989,695 Series A-1 non-voting convertible preferred shares for $800 million at $53.37 per share, and IEP commits up to $500 million of Series A-2 mandatory convertible preferred at the same price; both convert one-for-one into common stock, subject to HSR clearance and a 9.50% ownership blocker for Trafigura.

• Trafigura Becomes Exclusive Crude Supplier

  A 10-year crude oil supply agreement makes Trafigura the exclusive crude and feedstock intermediation counterparty for the Mandan and St. Paul Park refineries, with CVR retaining the crude slate and refining margin exposure; Trafigura also gets a board observer seat convertible into a director designation.

• Reverse Termination Fees Up to $252M

  CVR owes $84 million (2% of the base price) if antitrust clearance fails, $168 million (4%) for other specified failures to close, and $252 million (6%) for willful breach or failure to obtain financing; the outside date is 270 days after signing, extendable to 360 days.

auto_awesomeAnalysis · CVI · Energy & Transportation

How CVR plans to pay for the $4.2 billion Marathon refinery purchase is disclosed here in full for the first time, and the terms carry real cost for existing holders. Trafigura is putting in $800 million for roughly 15.0 million new Series A-1 convertible preferred shares at $53.37, while IEP has committed up to $500 million of Series A-2 mandatory convertible preferred at the same price — together about $1.3 billion of new equity on top of $2.5 billion of committed secured debt. Because the preferred converts one-for-one into common, the equity is genuinely dilutive, though the $53.37 reference price sits close to today's $54.36 quote. Trafigura also becomes the exclusive crude supplier to both new refineries for ten years and gets board observer rights that can convert into a board seat, while IEP locks in six board designees at current ownership. Walking away is not free: CVR owes reverse termination fees of $84 million, $168 million or $252 million depending on why it fails, and must keep at least $500 million of unrestricted cash throughout. Closing is targeted by year-end 2026 and hinges on HSR clearance and a North Dakota waste permit transfer.