Sunoco announced a confirmed agreement to acquire all outstanding shares of Parkland Corporation worth approximately $9.1 billion (C$125.7 billion), including assumed debt.
The acquisition is expected to increase immediately, with each ordinary unit having a distributable cash flow of more than 10% and operating interest rate synergy of $250 million by the third year.
Under the terms of the agreement, Parkland shareholders will receive 0.295 Suncorp units and each Parkland share will receive $19.80.
Parkland shareholders also have the option to obtain $44 per Parkland cash stock, or 0.536 unit shares per Parkland stock, but comply with Pula Town.
Within two years after the deal is closed, Sunoco will ensure that Suncorp Unitholders receive the same dividend as Sunoco Unitholders.
The transaction will be implemented as part of the arrangements under the Commercial Companies Act (Alberta) and requires approval of 66 2/3% of the votes conducted by Parkland shareholders.
Parkland directors and senior officials, which own 0.7% stake, have pledged to vote for the deal.
Michael Jennings, Executive Chairman of Parkland, said: “This strategic portfolio is a compelling result of Parkland shareholders. The board unanimously recommends you to conduct the proposed deal and acknowledges Sunoko’s commitment to maintaining Canadian efforts, retaining the Calgary headquarters and further investing in Canada.
“This partnership creates a huge financial benefit for shareholders and positions the combined company as the largest independent fuel distributor in the Americas.”
Parkland said the deal includes compelling financial benefits, industry-leading scale and stability, and accelerated growth.
Sunoco is expected to return to its long-term leverage target four times within 12-18 months of the acquisition.
The combined company will benefit from supplemental assets, giving fuel supply an advantage and further diversify Sunoco's portfolio and geographical footprint.
"This deal provides shareholders with direct value, including an attractive 25% premium," said Bob Espey, president and CEO of Parkland.
“Sunoco shares our commitment to Canadian growth, customer service, operational excellence and continuous investment, making our consolidated business stronger and better succeed.”
Sunoco plans to continue investing in the Bunaby refinery, known for its production of low-carbon fuels, which will continue to operate and supply fuel within the Lower Mainland.
The company also plans to support Parkland to expand its transportation energy infrastructure in Canada and provide more resources to reinvest in Canada, the Caribbean and the United States.
The transaction is subject to regulatory approval and other customary closing conditions and is expected to end in the second half of 2025.
Parkland's financial advisers include Goldman Sachs and Bofa Securities, and Norton Rose Fulbright serves as legal counsel in Canada.
Sunoco's financial adviser is the capital markets of Barclays and RBC, with legal advice from Stikeman Elliot, Weil, Gotshal & Manges, as well as Vinson & Elkins.
“The acquisition of Parkland for $9.1 billion was originally created and published by GlobalData-owned brand Offshore Technology.
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