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

Phillips 66 (PSX) and Marathon Petroleum (MPC) reportedly held merger discussions earlier this year, Semafor reported, citing people familiar with the matter. The proposed combination would have created a $180 billion oil-and-gas company, but talks fizzled and are unlikely to restart soon. The companies together would have represented around a quarter of U.S. refining capacity, creating significant antitrust concerns because only a handful of major standalone refiners operate in the country. The discussions nevertheless reflected increased merger enthusiasm under the Trump administration, which has taken a more accommodating approach to large transactions. Officials have approved major deals in other industries, including Warner Bros. Discovery’s $110 billion transaction and Juniper Networks’ $14 billion deal. Stanley Woodward, a senior Justice Department official, has advocated settlements rather than trials. Strategically, the combination could have supported stronger margins when fuel prices declined. Greater scale might have enabled the company to negotiate larger discounts from crude traders, while the companies’ complementary pipeline and storage networks offered potential operating benefits. Integrating those assets, however, would have been difficult. Phillips 66’s chemicals venture with Chevron includes mutual rights of first refusal, allowing either party to acquire the other’s wholly owned interest. Earlier efforts by Chevron and Phillips 66 to sell the business reportedly encountered obstacles. Marathon Petroleum’s publicly traded but controlled subsidiary, MPLX, would have added further transaction and governance complexity. PSX and MPC initially gained about 1% on Friday. By midday, PSX was up 0.15%, while MPC had surrendered its gains and was down 0.05%. MPC had risen more than 115% year to date, while PSX had gained nearly 81%. Stocktwits retail sentiment was bullish and unchanged for both companies; message volume was high for MPC and normal for PSX.