SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Date of Report
(Date of earliest event reported): November 21, 1996
VALERO ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-4718 74-1244795
(State of incorporation) Commission File (I.R.S. Employer
Number Identification No.)
530 McCullough Avenue, San Antonio, Texas 78215
(Address of principal executive offices) (Zip Code)
(210) 246-2000
(Registrant's telephone number)
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Item 5. Other Events.
On November 21, 1996, Valero Energy Corporation (the "Company")
publicly announced that the Company's Board of Directors had approved a
management recommendation to pursue strategic alternatives involving the
Company's principal business activities. In connection with this effort,
the Company engaged the investment banking firm of Lehman Brothers Inc,
which has assisted in soliciting indications of interest related to a
potential strategic alliance for the Company's natural gas related
services business.
As a result of this solicitation process, a number of companies
have submitted written proposals indicating a significant level of
interest in acquiring the Company's natural gas related services
business. In each case, the potential strategic partner has proposed
engaging in a transaction in which the Company would first divest its
petroleum refining and marketing operations. Such divestiture would
involve a distribution to the Company's stockholders of all of the shares
of the Company subsidiary through which the Company's refining and
marketing operations are conducted; following this spin-off of the refining
and marketing subsidiary, the Company and its remaining natural gas
related services business would then be acquired in a stock-for-stock
merger transaction in which holders of the Company's common stock would
receive common stock of the acquiring company.
The Company has invited those potential strategic partners
indicating the greatest levels of interest to conduct further due diligence
with respect to the proposed transaction, with the intention of then
negotiating a definitive merger agreement with the potential strategic
partner presenting the most attractive final proposal. The Company
currently expects that a definitive merger agreement may be concluded by
February 1997. However, there can be no assurance that, following such
further due diligence, an acceptable final proposal will be received,
that a definitive final agreement can be negotiated upon terms and
conditions satisfactory to the Company and its Board of Directors, or that,
if and when a definitive agreement is concluded, the conditions to
consummating such transaction, as specified in such definitive agreement,
will ultimately be met.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereto duly authorized.
Date: December 31, 1996
VALERO ENERGY CORPORATION
By: /s/ Edward C. Benninger
Edward C. Benninger
President
