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Marathon Plans $10 Billion Buyback After Speedway Sale

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(Bloomberg) -- Marathon Petroleum Corp. plans to repurchase as much as $10 billion of stock after the U.S. oil refiner completed the sale of its Speedway fuel retail chain.

The plan starts with a cash tender offer to buy as much as $4 billion of shares, or about 10% of its current market value, the company said Friday. The repurchase would be the oil refiner’s biggest-ever share buyback, according to data compiled by Bloomberg.

“After the completion of the tender offer, we intend to execute on the remainder of our $10 billion repurchase authorization over the subsequent 12 to 18 months,” Chief Financial Officer Maryann T. Mannen said in a statement. In addition, $2.5 billion of proceeds from the Speedway sale has been allocated to reduce long-term debt.

Marathon shares jumped as much as 5.1% to $61.80, the highest since January 2020. That compares with a 3% gain in the S&P 500 Energy Index.

Marathon agreed in March 2020 to sell Speedway to 7-Eleven Inc., a unit of Japan’s Seven & i Holdings Co., for $21 billion. The transaction followed months of pressure on Marathon from investors including Elliott Management Corp. and D.E. Shaw & Co. , pressing the company to make sweeping changes to improve its performance. Elliott had pushed for Marathon to break itself up into three separate businesses: refining, retail and pipelines.

The deal’s after-tax cash proceeds are estimated at $16.5 billion, the company said.

(Adds share price in fourth paragraph. An earlier version corrected the repurchase amount in first paragraph.)

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