Delek US Takes Step to Simplify Its Corporate Structure

BRENTWOOD, Tenn. — Delek US Holdings Inc. and Alon USA Partners LP have executed a definitive merger agreement under which Delek will acquire all the outstanding Alon Partners common units representing limited partner interests that it or its affiliates do not already own.

The acquisition is an all-stock for common units merger transaction, the company reported.

The deal comes several months after Delek took full ownership of Alon USA Energy Inc., as CSNews Online previously reported.

"This was one of our strategic initiatives following the acquisition of Alon USA on July 1, 2017. It should allow us to simplify our corporate structure, reduce public company costs, reallocate cash flow from distributions to growth investments and enable us to efficiently dropdown logistics assets to Delek Logistics Partners in the future," said Delek US Chairman, President and CEO Uzi Yemin.

"In addition, we should be able to move forward to capture cost of capital synergies as we utilize the balance sheet of Delek US to refinance high cost debt at Alon Partners," he added.

"For Alon Partners public unitholders, the transaction gives them ownership in a larger more diverse organization with increased daily trading volume through Delek US shares. I would like to thank the employees of both companies and the members of Alon Partners' conflicts committee for their hard work during this process," Yemin said.

Currently, Delek and its affiliates own approximately 51 million common units of Alon Partners, or 81.6 percent of the outstanding units. Under the terms of the merger agreement, owners of the outstanding common units of Alon Partners will receive a fixed exchange ratio of 0.49 Delek US shares for each common unit of Alon Partners.

This implies a 5-percent premium to the 30-day trading volume weighted average ratio through and including Nov. 7 of 0.4666 and a 2.9-percent premium to the ratio on Nov. 7, the day before the companies announced the deal.

Merger terms were negotiated, reviewed and approved by the conflicts committee of the board of directors of the general partner of Alon Partners. The committee unanimously approved the merger, the merger agreement and the related transaction. The Delek US board of directors and the board of directors of Alon Partners' general partner also approved the transaction.