CVR Energy (NYSE:CVI) reported record third-quarter earnings and announced an agreement to acquire Marathon Petroleum’s St. Paul Park, Minnesota, and Mandan, North Dakota, refineries, along with associated marketing operations and certain logistics assets, for approximately $4.2 billion.
Chief Executive Officer Dane Neumann called the proposed transaction “the largest acquisition in the company’s history,” saying it would nearly double CVR Energy’s refining capacity, broaden its Upper Midwest and Northern Great Plains presence, and add downstream marketing capabilities that the company does not currently have in its existing system.
Marathon Refinery Acquisition
The two acquired refineries have combined nameplate crude capacity of about 177,000 barrels per day, including 105,000 barrels per day at St. Paul Park and 72,000 barrels per day at Mandan. If completed, the deal would increase CVR Energy’s total crude-processing capacity from roughly 207,000 barrels per day to approximately 384,000 barrels per day.
The transaction includes a marketing business with up to 590 branded locations across the Upper Midwest and Northern Great Plains, although CVR Energy clarified during the question-and-answer session that it would not own the retail stores. Neumann said the marketing business would allow the company to retain more margin by controlling product further downstream, while also increasing renewable identification number, or RIN, generation through blending activity.
CVR expects about $70 million of annual run-rate cost and operational synergies. The company said the assets have historically operated at utilization rates in the high 90% range over the past five years and have received significant investment from Marathon.
Management said the acquired facilities process primarily Bakken and Canadian crude. Neumann estimated that, out of roughly 175,000 barrels per day of throughput at the assets, Bakken crude accounts for approximately 126,000 barrels per day, while Canadian crude represents just under 50,000 barrels per day. About half of the Canadian volume is expected to be Western Canadian Select, or heavy crude.
Management said Mandan has received small-refinery exemptions covering 50% of its Renewable Fuel Standard obligations for 2023, 2024 and 2025. However, Neumann said the company did not include future exemptions in its valuation of the business, meaning any additional relief would represent potential upside.
Financing, Leverage and Closing Timeline
CVR Energy plans to finance the acquisition with a combination of common equity, cash and debt. The equity funding is expected to include a large common-equity investment from Trafigura, a $500 million equity commitment from Icahn Enterprises LP, and approximately $650 million of cash from CVR Energy’s balance sheet.
The company has secured $2.5 billion in committed bridge financing and expects to replace it with syndicated secured debt financing before closing. It also expects to draw $300 million under an upsized $1.1 billion asset-based lending facility and plans to redeem its outstanding 2028 senior notes.
On a pro forma basis, CVR expects total debt excluding CVR Partners to be approximately $3.8 billion at closing, or less than two times estimated 2026 consolidated pro forma EBITDA. The company said it intends to use what management views as an above-mid-cycle margin environment to reduce leverage over time.
CVR said the transaction has unanimous board approval and is expected to close by the end of 2026, subject to customary conditions and regulatory clearance, including the expiration of the Hart-Scott-Rodino waiting period. Management said there is no earn-out associated with the transaction.
For the nine months ended Sept. 30, CVR said pro forma EBITDA would have risen from about $900 million on a standalone basis to approximately $2 billion after giving effect to the acquisition. Diluted earnings per share would have increased from $3.73 to $7.67. The company expects the deal to be more than 50% accretive to earnings and free cash flow in the first full year after closing.
Third-Quarter Results
CVR reported third-quarter consolidated net income of $563 million, or $5.67 per share, and EBITDA of $804 million. Adjusted EBITDA was $582 million and adjusted earnings per share were $4 after excluding a favorable $314 million change in Renewable Fuel Standard liability, $35 million of favorable inventory valuation effects, and $127 million of unrealized derivative losses.
Petroleum segment adjusted EBITDA rose to $565 million from $120 million in the third quarter of 2025, supported by higher Group 3 crack spreads and increased throughput. Combined throughput was approximately 228,000 barrels per day, while crude utilization reached 105% of nameplate capacity. Light-product yield was 93%.
The Group 3 2-1-1 crack spread averaged $68.50 per barrel, compared with $25.94 per barrel a year earlier. CVR’s adjusted realized margin was $34.97 per barrel, representing a 51% capture rate. Higher RIN expenses weighed on results, with net RIN expense totaling $235 million, or $11.20 per barrel, excluding the change in RFS liability.
The fertilizer segment generated adjusted EBITDA of $20 million, down from $71 million in the prior-year quarter. Ammonia utilization was 80%, affected by the East Dubuque plant turnaround.
Cash flow from operations was $655 million, and free cash flow totaled $593 million. CVR ended the quarter with $1.3 billion of consolidated cash and approximately $1.7 billion of liquidity excluding CVR Partners. The company also declared a quarterly dividend of $0.10 per share.
Outlook
For the fourth quarter, excluding the proposed Marathon assets, CVR expects petroleum-segment throughput of 210,000 to 225,000 barrels per day and direct operating expenses of $115 million to $125 million. The company forecast fertilizer ammonia utilization of 88% to 93% as the East Dubuque turnaround is completed.
Neumann said management remains constructive on refining conditions and believes the current upcycle could persist through 2027. He said the company evaluated the Marathon acquisition using historical mid-cycle earnings rather than current elevated margins, with current market conditions representing potential upside.
About CVR Energy (NYSE:CVI)
CVR Energy, Inc (NYSE:CVI) is a diversified energy company engaged primarily in petroleum refining and nitrogen fertilizer production. Through its refining operations, the company processes crude oil into transportation fuels and other refined products, including gasoline, diesel fuel, jet fuel and asphalt.
CVR Energy operates refineries in Coffeyville, Kansas, and Wynnewood, Oklahoma. The facilities primarily serve customers in the Midcontinent region of the United States and are supported by related logistics and distribution assets.
