Marathon Oil, the Texas-based integrated oil firm, saw its shares jump 6% and touch a new 52-week high today after announcing plans to split its downstream and exploration and production businesses, a plan that was scrapped in 2009 due to the global financial crisis.
Earlier this week in a note to clients, Deutsche Bank said Marathon (MRO) should reconsider the plan to unlock shareholder value. Marathon sold some refining assets in Minnesota last year in a $900 million sale to private equity firm TPG.
Even with that sale, Marathon's refining business, which will be known as Marathon Petroleum Corp., is expected to be the fifth-largest U.S. refiner, with six refineries having a combined capacity of 1.1 million barrels a day, according to the Wall Street Journal. The company will be based in Ohio.
The spin-off is expected to happen in June. UBS estimates that Marathon's refining business alone, which includes six refineries, is now valued around $11 billion, the Journal reported.