SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported):
January 31, 1997
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
jurisdiction Number Identification No.)
of incorporation
530 McCullough Avenue, San Antonio, Texas 78215
(Address of principal executive offices) (Zip Code)
(210) 246-2000
(Registrant's telephone number, including area code)
Not applicable
(Former name or address, if changed since last report)
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ITEM 5 OTHER EVENTS
Agreement and Plan of Merger
On January 31, 1997, Valero Energy Corporation ("Valero") and
PG&E Corporation ("PG&E) announced that they entered into a definitive
agreement and plan of merger (the "Agreement") for the acquisition of
Valero by PG&E. The acquisition will be accomplished through the merger
of Valero with a subsidiary of PG&E to be formed for purposes of the
acquisition (the "Merger").
Pursuant to the Agreement, immediately prior to the Merger
Valero's wholly owned subsidiary, Valero Refining and Marketing Company,
will be spun off.
PG&E will acquire Valero for approximately $1.5 billion, plus
adjustments for working capital and other considerations. PG&E will issue
$722.5 million of common stock, subject to certain closing adjustments, in
exchange for outstanding shares of Valero common stock, and will assume
certain outstanding debt and other liabilities. The exact number of shareS
of PG&E common stock will vary depending on the price of PG&E just prior
to the closing; however, the value to Valero stockholders is expected to be
approximately $14.25 of PG&E common stock per share of Valero stock.
Valero's stockholders will also receive one share of Valero
Refining and Marketing Company in the spin-off. The new refining and
marketing company will retain the Valero name and will apply to be listed
on the New York Stock Exchange. Both the spin-off of the refining and
marketing business and the merger with the subsidiary of PG&E are expected
to be tax-free transactions for Valero stockholders. The Merger is expected
to be completed in mid-1997. Completion of the Merger is subject to a number
of conditions, including the approval of Valero's stockholders, federal
antitrust clearance, and other customary closing conditions. In addition,
because Valero operates a power marketing subsidiary, the Merger will require
the approval of the Federal Energy Regulatory Commission.
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 thereunto duly authorized.
VALERO ENERGY CORPORATION
By: /s/ E. C. Benninger
E. C. Benninger
President
Dated: February 7, 1997.
