Two Texas companies, San Antonio-based Tesoro Corp. and El Paso-based Western Refining Inc., said Thursday that Tesoro is acquiring Western in a stock transaction valued at $6.4 billion. Given timely approvals, the acquisition is expected to be completed in the first half of next year.

The combined company will be headed by Tesoro CEO Greg Goff and the acquiring company’s Steven Sterin, executive vice president and CFO. Western CEO Jeff Stevens and Executive Chairman Paul Foster will both join an expanded Tesoro Corp. board.

The new company will be the sixth-largest U.S. refiner, with slightly more than 1 million b/d of refining capacity concentrated in the West. In the most recent U.S. rankings, Tesoro was ranked seventh (844,160 b/d of capacity) and Western was ranked 11th (242,500 b/d).

Goff said Western further beefs up Tesoro’s integrated business model, extending its portfolio into “attractive and growing markets [Minnesota, New Mexico and West Texas].” He called the transaction “transformative” in expanding access to advantaged crude oil supplies, a strong, multi-brand marketing/convenience store portfolio, and a robust platform for logistics growth.

Foster said the combined company will “further leverage our capabilities in refining, marketing and logistics.”

Goff and Foster highlighted five areas that will be strengthened by the expanded company, which will continue to operate under the Tesoro brand:

Goldman, Sachs & Co. is serving as financial adviser to Tesoro for the transaction, and Sullivan & Cromwell LLP is servings as it legal adviser. Barclays is serving as financial adviser to Western, and Davis Polk & Wardwell LLP is serving as its legal adviser.