HollyFrontier (HFC) and Sinclair receive request for additional information and documentary material from the FTC

HollyFrontier (NYSE: HFC)

As previously disclosed, on August 3, 2021, HollyFrontier Corporation (“HollyFrontier”) announced that it had entered into a Business Combination Agreement, dated as of August 2, 2021 (the “Business Combination Agreement”), by and among HollyFrontier, Hippo Parent Corporation (“New Parent”), Hippo Merger Sub, Inc. (“Parent Merger Sub”), The Sinclair Companies (“Sinclair HoldCo”) and Hippo Holding LLC, a wholly owned subsidiary of Sinclair HoldCo (“Sinclair NewCo”), to acquire certain refining, marketing and other businesses of Sinclair Oil Corporation. Pursuant to the Business Combination Agreement, HollyFrontier will acquire Sinclair NewCo by effecting (a) a holding company merger in accordance with Section 251(g) of the Delaware General Corporation Law whereby HollyFrontier will merge with and into Parent Merger Sub, with HollyFrontier surviving such merger as a direct wholly owned subsidiary of New Parent (the “HFC Merger”) and (b) immediately following the HFC Merger, a contribution whereby Sinclair HoldCo will contribute all of the equity interests of Sinclair NewCo to New Parent in exchange for shares of common stock of New Parent, par value $0.01 per share (“New Parent Common Stock”), resulting in Sinclair NewCo becoming a direct wholly owned subsidiary of New Parent (the “Sinclair Acquisition” and, collectively with the HFC Merger, the “HFC Transactions”). Immediately prior to the HFC Transactions, the transactions contemplated by that certain Contribution Agreement, dated as of August 2, 2021 (the “Contribution Agreement”), by and among Sinclair HoldCo, Sinclair Transportation Company (“STC”) and Holly Energy Partners, L.P. (“HEP”), pursuant to which HEP will acquire all of the outstanding shares of STC in exchange for 21 million newly issued common limited partner units of HEP and cash consideration equal to $325 million, will occur (the “HEP Transactions” and together with the HFC Transactions, the “Sinclair Transactions”).

On August 23, 2021, each of HollyFrontier and Sinclair HoldCo filed its respective premerger notification and report regarding the Sinclair Transactions with the U.S. Department of Justice and the U.S. Federal Trade Commission (the “FTC”) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”).

On September 22, 2021, HollyFrontier and Sinclair HoldCo each received a request for additional information and documentary material (“Second Request”) from the FTC in connection with the FTC’s review of the Sinclair Transactions.

Issuance of the Second Request extends the waiting period under the HSR Act until 30 days after both HollyFrontier and Sinclair HoldCo have substantially complied with the Second Request, unless the waiting period is terminated earlier by the FTC or the parties otherwise commit not to close the Sinclair Transactions for some additional period of time. HollyFrontier and Sinclair HoldCo will continue to cooperate with the FTC staff in its review.

HollyFrontier continues to expect that the Sinclair Transactions will be completed in mid-2022. The completion of the Sinclair Transactions remains subject to the expiration or termination of the waiting period under the HSR Act and the satisfaction or waiver of the other closing conditions specified in the Business Combination Agreement and the Contribution Agreement.

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