As an independent company, Lubricants & Specialties will operate a capital-light business model built for greater financial flexibility and stronger, more consistent free cash flow — while leveraging its core strengths in technology, globally recognized brands and extensive channels-to-market.

As part of this transformation, HF Sinclair has decided to retire its base oil refining assets in Mississauga, Ontario with the transition expected to be substantially completed over the course of 2027.

The Lubricants & Specialties business will maintain a strong presence in the Ontario region, including continued operation of its R&D laboratory, lubricant blending and packaging, as well as supply chain, logistics, and commercial operations.

The business will continue to deliver base oil solutions through new strategic commercial agreements with two premier global base oil manufacturers, complemented by continued access to Group I and specialty products from HF Sinclair’s Tulsa refinery. Together, these sources will enable the independent Lubricants & Specialties business to continue offering a full suite of Group I, Group II, and Group III base oils to the market.

The transformed model is expected to improve service through a more conveniently located distribution network across North America, while maintaining the quality standards customers expect across base oils, finished lubricants and specialty offerings.

"This announcement marks an important step in HF Sinclair’s portfolio optimization strategy," Franklin Myers, Chairperson and Chief Executive Officer. "The separation will unlock value by creating two focused businesses with enhanced flexibility to pursue their respective strategic and capital priorities."

Benefits of the Planned Separation

As leading standalone companies, both HF Sinclair and the independent Lubricants & Specialties business are expected to benefit from:

Enhanced strategic focus and operational agility
Greater alignment of capital deployment with each business’s specific growth priorities and investment needs
Increased ability to pursue strategic transactions independently, without competing for resources within a broader portfolio
Distinct and compelling investment profiles aligned with different investor bases
Dedicated leadership teams and governance structures with continued focus on driving performance
In addition, it is anticipated that both companies will have strong balance sheets and will be capitalized to provide financial flexibility to take advantage of future growth opportunities.

Increased Focus on Integrated Refining, Midstream, Marketing and Renewables Business

Following the completion of the transaction, HF Sinclair will be a resilient, cash-generative integrated downstream company with a diversified portfolio including:

Refining: The company will have a diversified refining footprint with a product mix skewed toward high-value gasoline and distillates.
Midstream: It will have integrated pipeline and terminal assets to support its refining operations, including its "Go-West" pipeline initiative.
Marketing: Building on its base of more than 1,600 independent Sinclair-branded stations across more than 30 states, the company will be positioned to accelerate growth through new stores and joint venture partnerships.
Renewables: HF Sinclair will leverage its renewable diesel production to generate positive returns.
Following the separation, HF Sinclair will also prioritize maintaining an investment-grade financial profile and targeting a 50% payout ratio through regular dividends and open-market share repurchases, while preserving flexibility for reinvestment and opportunistic M&A.

Throughout this transition, HF Sinclair will maintain its focus on safe operations, regulatory compliance, and uninterrupted supply and service, while continuing to meet customer specifications.

Transaction Details

HF Sinclair anticipates the separation of Lubricants & Specialties through the capital markets in a tax-efficient manner for HF Sinclair and its shareholders. The transaction is intended to be executed over the next 12-18 months.

The separation transaction will not require a shareholder vote and is subject to satisfaction of customary conditions, including final approval by HF Sinclair’s Board of Directors, receipt of a tax opinion from counsel, receipt of a private letter ruling from the U.S. Internal Revenue Service, the filing and effectiveness of any registration statements with the U.S. Securities and Exchange Commission (the "SEC"), approval for listing on the New York Stock Exchange, applicable regulatory approvals and satisfactory completion of financing for the independent Lubricants & Specialties business. There can be no assurance that any separation will ultimately occur, or if one does occur, of its terms or timing.