By Dhirendra Tripathi
Investing.com – Marathon Petroleum (NYSE:) shares rose more than 4% Friday following the company’s decision to use cash from the sale of its Speedway fuel retail chain to repurchase $10 billion of its stock.
The oil refiner today said it has completed the $21 billion sale of Speedway to 7-Eleven, a wholly owned, indirect subsidiary of Seven & i Holdings.
After tax, the company stands to net $16.5 billion from the sale.
Marathon has $2.9 billion remaining in a previously authorized repurchase plan. Its board has declared an additional $7.1 billion buyback program, bringing the size of the yet-to-be-completed exercise to $10 billion
Marathon will initiate a $4 billion buyback exercise in a range of $56 to $63 per share. This will equal 10% of its current market capitalization.
Once completed, it will execute the remaining repurchase over 12 to 18 months, the company said.
Other than the $10 billion buyback plan, Marathon will use $2.5 billion from the sale to bring down long-term debt.
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