Valero Energy Corporation (NYSE:VLO) (“VLO”) entered into an agreement to acquire 32.5% stake in Valero Energy Partners LP (NYSE:VLP) (“VLP”) for approximately $950 million on October 18, 2018. Pursuant to the terms of the transaction, each of the common units representing limited partner interests in VLP, other than common units owned by VLO and its subsidiaries, will be converted into the right to receive $42.25 per common unit in cash without any interest thereon and all such common units will be automatically canceled and cease to exist. VLP’s incentive distribution rights and general partner interest, and the common units owned by VLO and its subsidiaries will be unaffected by the merger and will remain issued and outstanding, with no consideration being delivered in respect thereof. Immediately prior to the closing, all VLP restricted units outstanding immediately prior to the closing shall receive immediate and full acceleration of vesting and each holder of such restricted unit will receive from closing an amount equal to $42.25. In addition, the merger agreement provides that holders of VLP’s common units will receive a quarterly cash distribution of at least $0.551 per common unit for the third quarter of 2018. VLO expects to fund the purchase with a combination of cash on hand and/or borrowings under its revolving credit facility. Upon closing, VLP will be a wholly owned subsidiary of VLO and will cease to be a publicly held partnership. VLO has a $3 billion revolving credit facility with JPMorgan Chase Bank N.A. as administrative agent and the several lenders party thereto that matures in November 2020. VLO has the option to increase the aggregate commitments under the revolving credit facility to $4.5 billion and may request two additional one-year extensions, subject to certain conditions. The revolving credit facility also provides for the issuance of letters of credit of up to $2 billion. The merger agreement also includes customary closing conditions, including, among others, the approval of the transaction by a majority of the outstanding VLP common units, the effectiveness of an information statement to be filed by VLP with respect to VLO, the absence of a material adverse effect with respect to VLP, any waiting period applicable hereby under any applicable Antitrust Law shall have been terminated or shall have expired, simultaneously with transaction, VLP and Valero Terminaling & Distribution Company, that is the record holder of a majority of the outstanding common units entered into a support agreement, whereby Valero Terminaling has agreed to deliver a written consent approving the transaction prior to the closing thereof. The written consent delivered pursuant to the support agreement will constitute the requisite vote of VLP’s common units to approve the transaction. As a result, VLP has not solicited and is not soliciting approval of the transaction by holders of VLP’s common units. VLP shall, through the Valero Energy Partners GP LLC Board (“GP Board”), submit the agreement to a vote of the Limited Partners by written consent, and recommend to the Limited Partners approval of the agreement and the merger. The VLO special committee appointed has unanimously approved the transaction. The GP Board directed its Conflicts Committee, composed entirely of independent directors to review, evaluate, negotiate and provide special approval of the transaction. The GP Conflicts Committee, after consultation with its independent legal and financial advisors, and following negotiations between the GP Conflicts Committee and the VLO Special Committee, unanimously approved the transaction and determined that the transaction is fair and reasonable to the unaffiliated holders of VLP’s common units and in the best interest of VLP. Following the determination of the GP Conflicts Committee, the GP Board unanimously approved the transaction and determined that the transaction is fair and reasonable to the unaffiliated holders of VLP’s common units and in the best interest of VLP. As of January 10, 2019, unitholders of VLP approved the merger. David Elder of Akin Gump Strauss Hauer & Feld LLP acted as legal advisor and Jefferies LLC acted as financial advisor to the Valero Energy Partners GP LLC’s Conflicts Committee. J.P. Morgan Securities LLC acted as financial advisor and Jeremy L. Moore and Joshua Davidson Baker Botts L.L.P. and Richards, Layton & Finger, PA acted as legal advisors to VLO. VLP has agreed to pay Jefferies $2.5 million as compensation for its services, $350,000 of which was paid in connection with its engagement and $2.15 million of which was paid upon delivery of the fairness opinion. Computershare Trust Company N.A. served as the paying agent for VLO in connection with the deal for a fee of $15,000. Valero Energy Corporation (NYSE:VLO) completed the acquisition of 32.5% stake in Valero Energy Partners LP (NYSE:VLP) on January 10, 2019. Effective January 10, 2019, Valero Energy Partners' common units will no longer be publicly traded on the New York Stock Exchange. Effective upon the closing of the Merger, each of Timothy J. Fretthold, Robert S. Beadle and Randall J. Larson, the independent members of the board of directors (the “VLP GP Board”) of the General Partner, resigned from the VLP GP Board and ceased to be a director of the General Partner.