Sunoco, the Dallas-based fuel supplier, is currently gearing up to finalize a hefty $7.3 billion acquisition of San Antonio's NuStar Energy by July. NuStar, well-rooted in they city with its sprawling headquarters, promises to keep its operations grounded in San Antonio for at least two years following the deal, as per the company's announcements. However, the long-term horizon for NuStar in the city is hazy, sparking concerns of another corporate migration from the city known for its business attrition. NuStar Energy, launched as a subsidiary of Valero Energy Corp, and once poised as the visionary Bill Greehey’s next triumph, is now faced with an uncertain local future post-acquisition, according to the Express News.
Beyond this two-year assurance, speculation abounds regarding the fate of NuStar's San Antonio operations, and by extension, the city's track record of losing headquarters to out-of-town bids. This pattern of corporate exodus is a point of contention for figures such as former Bexar County Judge Nelson Wolff, who cited the city's "unfortunate history" with such occurrences. While San Antonio holds onto Fortune 500 heavyweights like Valero and USAA, and remains home to sizable companies such as H-E-B, the region has seen its fair share of corporate headquarters relocations over the years. This includes CST Brands Inc. which was also spun off from Valero, as reported by the Express News.
In a bid to improve its financial flexibility, NuStar recently sold its North Side headquarters to Truist Financial Corp. for a striking $103 million, in a move many companies are making to offset debt and free up capital. Yet, NuStar isn't packing boxes; they've instead leased back the property, agreeing on a 20-year tenancy with options to extend. This tactical play that turns real estate into working capital, allows the company to channel funds towards debt reduction and potentially future investments, as was laid out in the Express News.
With the eyes of the business community on them, the leadership at NuStar remains upbeat about the Sunoco acquisition. They firmly believe that, owing to their complementary operations, the merger will necessitate NuStar's expertise, ensuring the legacy of the company's assets and workforce. Sunoco's lack of detailed comments on its intentions for NuStar past the initial two-year period have spurred some unease within city’s economic circles. Sunoco CEO Joe Kim, a San Antonio alumnus, may play a pivotal role in shaping the future narrative for the companies' local operations. NuStar's statement on the acquisition expressed confidence in the value of their workforce to Sunoco, a sentiment echoed by regional economic development leaders, as stated in the Express News.
Amidst this complex business maneuvering, NuStar's top brass has made a significant shift as Greehey, now 87, stepped down from his chairman position in late 2022, passing the reigns to CEO Brad Barron. With a portfolio boasting 63 storage terminals and more than 9,500 miles of pipeline, NuStar's impact on the energy transport and storage sector - and by extension, local San Antonio economy - is non-negligible. The community awaits the unfolding of NuStar's new chapter under Sunoco's aegis.
