Parkland’s trusted brands within their commercial business provide commercial, industrial and residential customers with essential fuels, lubricants and services. Photo credit: parkland.ca
BURNABY – Sunoco LP has agreed to purchase all outstanding shares of Parkland Corporation for $9.1 billion.
Parkland, headquartered in Calgary, has over 4,000 retail locations in 26 countries, and operates gas stations under the Chevron, Esso and FasGas Plus brands, amongst others, and holds the rights to the On The Run convenience store brand. In Canada, along with Triple O’s fast food restaurant chain under the White Spot banner in B.C. Since 2009, it has owned Columbia Fuels.
“This strategic combination is a compelling outcome for Parkland shareholders,” says Michael Jennings, Executive Chairman of Parkland. “The Board unanimously recommends the proposed transaction, recognizing Sunoco’s commitment to safeguarding Canadian jobs, retaining the Calgary head office, and further investing in Canada. This partnership creates significant financial benefits for shareholders and would position the combined company as the largest independent fuel distributor in the Americas.”
Parkland President and CEO Bob Espey adds: “This transaction delivers immediate value for shareholders, including an attractive 25% premium. Sunoco shares our commitment to growth, customer service, operational excellence, and ongoing investment in Canada, making our combined business stronger and better positioned for sustained success.”
Sunoco will maintain a Canadian headquarters in Calgary and significant employment levels in Canada, and is committed to continuing to invest in Parkland’s innovative refinery in Burnaby, which produces low-carbon fuels, while maintaining safe, healthy and growing operations for the long-term. The refinery will continue to operate and supply fuel within the Lower Mainland.
Sunoco will continue to support Parkland’s plan to expand its Canadian transportation energy infrastructure, while the combined company’s expanded free cash flow will provide additional resources for reinvestment in Canada, the Caribbean, and the United States in support of both existing and new opportunities.
The proposed Transaction will be effected pursuant to a plan of arrangement under the Business Corporations Act (Alberta), which is required to be approved by an Alberta court. The Transaction will require approval by 66 2/3 per cent of the votes cast by the shareholders of Parkland. In addition to shareholder and court approvals, the Transaction is subject to applicable regulatory approvals, including approvals under the Investment Canada Act, approval of the listing of the SUNCorp shares to be issued under the Transaction on the NYSE, and the satisfaction of certain other closing conditions customary for a transaction of this nature.
On March 5, Parkland announced that its Board of Directors had initiated a review of strategic alternatives aimed at identifying opportunities to maximize value for all shareholders. A special committee of independent directors was appointed to oversee and lead this comprehensive review,
And following this announcement, discussions with Sunoco intensified significantly, leading to the transaction.
Based on the unanimous recommendation of Parkland’s Special Committee, and following thorough consultation with its financial and legal advisors, Parkland’s Board of Directors unanimously approved the transaction.
Parkland intends to hold a special meeting of Parkland shareholders on June 24 to approve the Transaction.
Business Examiner
