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Tesoro & Western Refining Merger Faces Delays

SAN ANTONIO — The pending $6.4 billion merger between Tesoro Corp. and Western Refining Inc. could face a delay, according to Blane Peery, vice president and controller for Tesoro. Perry reported that the Federal Trade Commission (FTC) sent both companies a request for further information on Feb. 10, according to the San Antonio Business Journal.

The inquiry could extend the merger review for up to 30 days starting from the time both companies have filed their answers.

"We and Western have been cooperating with the FTC staff since shortly after the announcement of the merger agreement and are continuing to cooperate with the FTC staff in its review of the transactions contemplated by the merger agreement," Peery wrote in a filing with the U.S. Securities and Exchange Commission. "We continue to expect the acquisition to be completed in the first half of 2017."

Several days before the filing, a group of Tesoro stockholders filed a class action lawsuit against the company in Delaware's Chancery Court, alleging that its disclosures are inadequate and do not include key details about Goldman Sachs & Co., financial adviser to the deal.

A separate class action lawsuit filed in El Paso's federal court by Western Refining stockholders alleges that the company and its directors undervalued its stock and made misleading statements about the deal, according to the report.

Tesoro offered to pay Western Refining stockholders $37.30 per share or issue 0.4350 shares of Tesoro common stock for each share of Western Refining stock when the deal was announced in November 2016.

San Antonio-based Tesoro is an independent refiner and marketer of petroleum products with a retail-marketing system includes more than 2,400 retail stations under the ARCO, Shell, Exxon, Mobil, USA Gasoline, Rebel and Tesoro brands.

El Paso-based Western Refining is an independent refining and marketing company that operates refineries in El Paso and Gallup, New Mexico and St. Paul Park, Minnesota. Its retail operations includes retail service stations and convenience stores in Arizona, Colorado, Minnesota, New Mexico, Texas, and Wisconsin, operating primarily under the Giant, Howdy's and SuperAmerica brands.

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