Findlay, Ohio-based Marathon Petroleum Corp. announced plans to separate Speedway into an independent, publicly traded company. The company also announced that Chairman and CEO Gary Heminger will retire in 2020 after 45 years with the company.
“Today’s announcement to separate Speedway will create a new independent company that is well-positioned to achieve sustained growth and create substantial shareholder value,” said Heminger. “We have built Speedway into an exceptional business. Over the past eight years we have grown Speedway nearly four-fold from roughly $400 million of annual EBITDA to approximately $1.5 billion. Speedway has delivered leading same-store merchandise growth, fuel margins, and profitability — and has significant opportunities for further growth. With a potential enterprise value of $15 billion to $18 billion for standalone Speedway, we believe this transaction will unlock significant value for MPC shareholders and form the basis of a compelling value proposition for future Speedway investors.”
The independent Speedway will consist of Marathon Petroleum’s company-owned retail store operations, and Marathon Petroleum will retain its direct-dealer business.
The separation of Speedway will not require a shareholder vote but will be subject to final approval by the Marathon Petroleum board. Marathon Petroleum will also initiate a nationwide search for a Speedway CEO from both internal and external sources.
“We will execute on the separation of Speedway and evaluate opportunities to unlock the value of midstream, while continuing to optimize the larger combined business and progress the realization of our targeted synergies. Our goal has been, and continues to be, maximizing shareholder value over the long term,” Heminger said.
Heminger has served as president and CEO since the company’s spinoff from Marathon Oil in June 2011, and as chairman and CEO since 2016. He has also served as chairman and CEO of MPLX GP LLC since 2012.
“On behalf of the Board of Directors, I am grateful to Gary for his distinguished and successful leadership of this great company, for which he has earned the unqualified and unanimous support of the board,” said Lead Independent Director James Rohr. “We thank him also for his commitment to the board’s request that he remain on for extended service following the announcement of the Andeavor combination to ensure the successful integration of the two companies.”
The board has appointed a committee, led by Edward Galante, that will consider internal and external candidates to succeed Heminger. A nationwide search is currently underway.
Under Heminger’s leadership, the company has continued to create value for shareholders. Since 2011, the company has delivered returns of 323%, outstripping the 183% growth of the S&P 500 over the same period, and returned nearly $21 billion to shareholders.
As CEO, Heminger has headed several transformative acquisitions, resulting in Marathon Petroleum’s current position amongst the highest performers in the refining, retail and midstream segments of the industry.
“I am very proud of the management team with whom I have served over the years”, said Heminger, “and I thank them for their dedication, loyalty and diligence that has fueled the steady growth of the company. Their expertise, and the commitment to superior execution by everyone at Marathon Petroleum, has resulted in MPC being considered one of the very best operators in the industry today.”
Heminger joined Marathon in 1975, and his experience spans more than four decades in a range of business groups and functions.
As vice president of Business Development he was integral to the formation of Marathon Ashland Petroleum in January 1998, and was named senior vice president, Business Development in 1999. In January 2001, he was appointed executive vice president, Supply, Transportation and Marketing and, subsequently, president of Marathon Ashland Petroleum LLC, in September 2001.
He was appointed president and CEO in 2011, and elected Chairman of the board in 2016.
Gregory Goff, executive vice chairman of Marathon Petroleum and member of the board of midstream company MPLX GP LLC, will also retire, effective Dec. 31.