Earlier today, certain media outlets erroneously reported that the California Attorney General has filed suit to enjoin "a merger" between Valero Energy Corporation, Valero Energy Partners LP, and Plains All American Pipeline LP. The erroneous report was apparently based on a filing by the California Attorney General in the United States District Court for the Northern District of California, mischaracterizing as a "merger" a proposed transaction involving the acquisition by a subsidiary of Valero Energy Corporation of two petroleum storage and distribution terminals located in Martinez and Richmond, California currently owned by a subsidiary of Plains All American Pipeline, L.P. It is this proposed acquisition of certain assets that the California Attorney General is seeking to block.
On July 10, the United States District Court for the Northern District of California denied the California Attorney General's motion for a temporary restraining order (TRO) seeking to block the proposed transaction. The Office of the Attorney General filed its motion despite the fact that the Federal Trade Commission (FTC) recently ended an extensive investigation of the same transaction, ultimately concluding that the transaction merited no regulatory action.
Valero Chairman and CEO Joe Gorder and Plains Chairman and CEO Greg Armstrong stated that they are disappointed by the California Attorney General's action, given the FTC's decision to let the transaction proceed and also given that the two companies do not compete in California.
As the FTC and California Attorney General know, Valero plans to meaningfully expand capacity at both the Martinez and Richmond Terminals, which will benefit customers as well as California consumers. Valero and Plains All American will continue to vigorously defend the planned transaction in federal court.
