PSX, MPC Reportedly Weighed A Giant Merger — What Sank The $180B Deal Between Phillips 66 And Marathon Petroleum

A tie-up between two of America’s biggest refiners would have reshaped the industry, but antitrust concerns and operational complexity ultimately derailed the deal.

• The combined company would have reportedly controlled around a quarter of U.S. refining capacity, putting the deal under intense antitrust scrutiny.
• The talks highlight how the Trump administration’s more merger-friendly stance has encouraged companies to explore blockbuster combinations.
• Phillips 66’s Chevron-linked chemicals venture and Marathon’s controlled MPLX subsidiary would have complicated any merger structure.

Phillips 66 (PSX) and Marathon Petroleum (MPC) reportedly held merger talks earlier this year over a deal that would have created a $180 billion oil-and-gas giant. But the discussions ultimately fizzled out and are unlikely to be resurrected anytime soon, Semafor reported, citing people familiar with the matter.

Both PSX and MPC shares gained around 1% on Friday. At the time of writing on Friday midday, PSX stock was trading 0.15% higher, while MPC shares had pared all their gains and had edged down 0.05%.

Antitrust Scrutiny Loomed Over $180B Deal

The talks taking place are a sign of the exuberance fueling mergers and acquisitions (M&A) under the Donald Trump administration, Semafor reported. A combination of Phillips 66 and Marathon Petroleum would have brought together businesses accounting for around a quarter of U.S. refining capacity and faced antitrust scrutiny, given there are only a handful of standalone refiners in the country.

But administration officials have waved through a number of big mergers in other industries, including a $110-billion deal for Warner Bros. Discovery and a $14-billion deal for Juniper Networks. Stanley Woodward, a top Justice Department official, has pushed to avoid trials in favor of settlements.

Combined Company Could Have Boosted Margins

A combined company would have been able to maintain a higher profit margin even when fuel prices dip, in part by negotiating stronger discounts from crude traders. The two companies also have a number of complementary businesses, including substantial pipeline and storage networks, although combining the operations would have been thorny.

Phillips 66 has a joint venture with Chevron in chemicals, with each side having a right of first refusal to acquire the other side's wholly owned interest. Previous efforts by both Chevron and Phillips 66 to sell the business have reportedly run into hurdles. Marathon Petroleum also has a publicly traded but controlled subsidiary, MPLX, which would have added additional complexity to any combination.

MPC, PSX Stocks: Stocktwits Retail Sentiment

On Stocktwits, retail sentiment for MPC was ‘bullish,’ unchanged over the past 24 hours, while message volume was ‘high.’ Retail sentiment for PSX was also ‘bullish,’ unchanged over the past day, while message volume was ‘normal.’

MPC stock has surged over 115% so far this year, while PSX shares have gained nearly 81% during the same period.

For updates and corrections, email newsroom[at]stocktwits[dot]com.<