This article has been updated.
NuStar Energy, one of the largest independent liquids terminal and pipeline operators in the country, will be acquired by Dallas-based gas station owner Sunoco in a $7.3 billion deal, the two companies announced Monday.
Sunoco will acquire NuStar, whose corporate headquarters is in San Antonio, in an all-stock transaction that will result in what Sunoco leaders said would be a $16 billion company.
Under the terms of the agreement, NuStar shareholders will receive 0.4 Sunoco common stock units for each NuStar common unit, worth approximately $23.78 based on Sunoco’s closing share price Friday. NuStar’s closing stock price on Friday was $18.03 and its stock was up in Monday’s trading.
The acquisition was unanimously approved by the board of directors of both companies and is expected to close in the second quarter of 2024 once the deal is approved by NuStar shareholders and regulators.
The deal gives Sunoco access to NuStar’s transportation and storage facilities, including a portfolio of about 9,500 miles of pipeline and 63 terminal and storage facilities that store and distribute crude oil, refined products, renewable fuels, ammonia and specialty liquids.
Since it went public in 2001, NuStar, whose website says it employs roughly 1,200 people, grew from $387 million in assets to $5 billion and from $100 million in revenues to $1.7 billion.
NuStar Energy spun off from Valero Energy Corp. in 2007. Valero’s founding CEO and chairman, Bill Greehey, helped build NuStar into one of the largest petroleum pipeline and terminal operators in the United States after a career leading Valero, which he founded in 1980. He retired as CEO in 2005 and as chairman in 2007.
When Greehey stepped down from his position as NuStar’s chairman of the board in October 2022, becoming chairman emeritus, the board named NuStar CEO and President Brad Barron as chair.
Barron said in a statement provided to the San Antonio Report that he believes the increased size and scale of the combined company, which would become the seventh-largest publicly traded limited partnership in the U.S., “will provide increased access to capital while at the same time creating more opportunities for growth.”
Barron said the operations of NuStar and Sunoco are “highly complementary and do not overlap. As a result, Sunoco will need the expertise of our employees to ensure the continued operation of the legacy NuStar assets.”
In April of last year, NuStar sold its Northside headquarters for $103 million, according to the San Antonio Express-News, but did not move, instead renting from the new owners, using the proceeds to pay off outstanding debt.
NuStar spokesman Chris Cho said the company has a 20-year-lease on the building, and Sunoco “has committed to keeping the building open for two more years.” Roughly 500 NuStar employees work in San Antonio, he said.
The NuStar deal comes almost six years after the acquisition of another San Antonio-based energy company. Tesoro, an independent refiner and marketer of petroleum products, was known as Andeavor when it was acquired by Marathon Petroleum in 2018. The combined company’s headquarters is in Findley, Ohio.
With NuStar’s acquisition, Valero may remain the only major energy company to headquarter in San Antonio, and only one of two remaining Fortune 500 companies headquartered here, along with USAA.
Sunoco is an affiliate of U.S. pipeline operator Energy Transfer, which is controlled by billionaire Kelcy Warren.
NuStar Energy, Valero and the Greehey Family Foundation are financial supporters of the San Antonio Report. For a full list of business members, click here.
