Elliott, which first targeted Marathon in 2016 and holds a 2.5% stake in the Findlay, Ohio-based group, said it has identified steps that could "unlock more than $22 billion in value for shareholders" and boost the company's stock price by more than 60%.
"To unlock the value currently trapped in Marathon's conglomerate structure, we believe the company must immediately initiate a separation into three independent entities, which will create three strong, independent companies - each a leader in its sector," Elliott said in a letter to Marathon's executive board.
Marathon shares were trading up 7.8% at $59.82.
Marathon said in response that it would continue to engage in constructive dialogue with Elliott. It touted the fact that it returned about $850 million to shareholders in the second quarter and more than $2.1 billion year to date through dividend payouts and share repurchases.
Elliott previously targeted Marathon in 2016, urging a similar three-part breakup, before accepting a compromise that it said included a promise from Marathon to simplify its midstream business and review its Speedway chain of company-owned retail gasoline stores.
"Unbeknownst to us at the time, while the company's management team was purportedly giving a Speedway separation a "full and thorough review," it was in fact already far along in discussions to acquire Andeavor, another integrated refining conglomerate," Elliott said.
"Thus, while Marathon executives were telling investors that they were taking a critical look at their structure, they were in fact already contemplating and in the process of executing a massive recommitment to their failed conglomerate model, as detailed in the merger proxy for the Andeavor transaction."