Sunoco has announced a definitive agreement to acquire all outstanding shares of Parkland Corporation in a transaction valued at approximately $9.1bn (C$12.57bn), including assumed debt.
This acquisition is expected to be immediately accretive, with more than 10% accretion to distributable cash flow per common unit and $250m in run-rate synergies by the third year.
Under the terms of the agreement, Parkland shareholders will receive 0.295 SUNCorp units and C$19.80 for each Parkland share.
Parkland shareholders may also choose to receive C$44 per Parkland share in cash or 0.536 SUNCorp units per Parkland share, subject to proration.
For two years following the transaction’s close, Sunoco will ensure that SUNCorp unitholders receive the same dividend equivalent as Sunoco unitholders.
The transaction will be implemented as part of a plan of arrangement under the Business Corporations Act (Alberta) and will require approval by 66 2/3% of the votes cast by Parkland shareholders.
Parkland’s directors and senior officers, holding 0.7% of the shares, have committed to vote in favour of the transaction.
Parkland executive chairman Michael Jennings said: “This strategic combination is a compelling outcome for Parkland shareholders. The Board unanimously recommends the proposed transaction, recognising 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.”
The deal includes compelling financial benefits, industry-leading scale and stability, and accelerated accretive growth, according to Parkland.
Sunoco expects to return to four-times its long-term leverage target within 12–18 months after closing the acquisition.
The combined company will benefit from complementary assets, enabling an advantaged fuel supply and further diversifying Sunoco’s portfolio and geographic footprint.
Parkland president and CEO Bob Espey said: “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 plans to continue to invest in the Burnaby Refinery, known for producing low-carbon fuels, which will continue to operate and supply fuel within the Lower Mainland.