Valero Buys Former Houston Refinery for $320.5M, Eyes 165,000 BPD Restart
VLO has more than doubled off its 52-week low of $159.9.
Summary
Valero's Valero Refining-Texas subsidiary signed a definitive agreement to buy LYB Houston Hub Holdings from a LyondellBasell unit for $320.5 million, subject to closing adjustments, with Valero assuming responsibility for ongoing site operations, environmental liabilities, pension costs and related employee obligations. The roughly 700-acre site sits adjacent to Valero's Houston refinery on the Ship Channel and previously operated as a petroleum refinery. Valero expects to initially restart 165,000 BPD of light sweet crude processing by year-end 2027, with room to later add high-complexity heavy sour capacity, and it expects the acquisition to deliver a >25% after-tax IRR using forward mid-cycle pricing with minimal commercial synergies and to be accretive in the first year of operations. The price is small relative to Valero's scale, but it reopens Gulf Coast capacity at a fraction of replacement value and follows a blowout Q3 ($6.8B profit, $23.90 EPS) plus a new $10.0B buyback. Closing hinges on HSR antitrust clearance and is expected by end of 2026. LyondellBasell is the seller and sheds the site.
Updated with an SEC 8-K filing · What changed
Updates
· SEC 8-K — Valero expects the acquisition to deliver a >25% after-tax IRR using forward mid-cycle pricing with minimal commercial synergies, and be accretive in the first year of operations.
At the time of this announcement, VLO was trading at $390.39 on NYSE in the Energy & Transportation sector, with a market capitalization of approximately $107.3B. The 52-week trading range was $159.90 to $461.52. This news item was assessed with positive market sentiment and an importance score of 8 out of 10. Source: BusinessWire.