ENB Pub Note: This is from Nathan’s Substack. We highly recommend following him as he is a wealth of energy and knowledge in the U.S.
Sunoco LP, a major player in the U.S. energy sector, has announced a landmark deal to acquire Parkland Corporation for $9.1 billion [1]. This strategic move is set to create the largest retail fueling and convenience store giant in the Americas, significantly expanding Sunoco’s footprint across Canada, the U.S., and the Caribbean [2].
Key details of the acquisition
- The deal includes both cash and stock components, with Parkland shareholders receiving 0.295 Sunoco units and CAD $19.80 per share [1]. Alternatively, they can opt for CAD $44.00 per share in cash or 0.536 Sunoco units [1].
- The acquisition promises immediate financial benefits, including over 10% accretion to distributable cash flow per common unit and $250 million in annual synergies within three years [1].
- Sunoco will gain access to Parkland’s extensive network of approximately 1,860 retail gas stations across Canada, operating under brands such as Ultramar, Esso, Chevron, and Pioneer [3]. This will complement Sunoco’s existing network of 7,400 locations [2].
Implications for the industry
This merger will likely reshape the fueling and convenience store landscape in the Americas as Sunoco and Parkland will enhance their fuel supply capabilities and diversify their geographic footprint [1]. The deal also underscores a commitment to investing in low-carbon fuels and maintaining significant employment levels in Canada [1].