SAN ANTONIO, Jan. 2 (UPI) -- Valero Energy Corp. on Wednesday completed its acquisition of Ultramar Diamond Shamrock Corp., creating an energy powerhouse with annual revenues of $32 billion.
The combined company, which will use the Valero name and stock symbol, will be one of the top three refining companies in the United States, according to Bill Greehey, the firm's chairman and chief executive officer.
"The new company combined will make more money than the individual companies together," Greehey said, after making the rounds serving breakfast tacos to employees of UDS, which is also headquartered in San Antonio.
The merger gives Valero 12 refineries stretching from California to New Jersey to Canada, and more than 5,000 gasoline stations selling gas under the names Total, Diamond Shamrock, Ultramar, and Beacon.
"Obviously, getting the refinery in California is a big plus, because California margins have always been better than any other part of the country, because their gasoline is much cleaner than anywhere else," Greehey said. "Markets in the United States are different depending on the region, and now that we have refineries in all different parts of the country, it really does help balance it."
Valero's products range from conventional and reformulated gasoline to petrochemicals, asphalt, propane, and jet fuel.
"A lot of people buy our gasoline every day and don't know it," Valero Senior Vice President Mary Rose Brown said.
"The thing refining and retail gives you is a counter cyclical asset," Brown said. "This past year was a particularly good year for refiners, other years are good for retailers. That helps to balance out earnings."
The combined company has 23,000 employees. Greehey said there would be no lay offs due to the merger.
In addition to the refineries, with a total throughput capacity of 2 million barrels per day, Valero obtains Shamrock Logistics, UDS' 4,600-mile proprietary pipeline network.
Greehey said the merger would create savings from $200 million to as much as $500 million.
Greehey said additional acquisitions are a possibility for Valero.
"We'll continue to look at mergers and acquisitions," he said. "That will be part of our strategy."
In May, Valero and UDS announced that they had reached an agreement for the companies to merge with Valero being the surviving corporation. The shareholders of both companies voted a majority of shares in favor of the merger on Sept. 27. And the commissioners of the Federal Trade Commission approved a consent decree on Dec. 19 allowing the two companies to complete their merger.
