Parkland Corp. shareholders on Tuesday voted in favor of a US$9.1-billion agreement to be acquired by U.S.-based Sunoco.
Parkland said that 93.46% of the votes were in favor of the deal, which will create America’s largest independent fuel distributor. The deal, which includes both cash and stock, is expected to close later this year.
As we discussed in Mr. Brightside, Parkland has a network of about 4,000 fuel and retail locations across Canada, the U.S. and the Caribbean. Sunoco, in turn, operates in more than 40 U.S. states, Puerto Rico, Europe and Mexico; distributes fuel through more than 7,400 branded locations; and owns and operates about 14,000 miles of crude oil and products pipeline and more than 100 fuel terminals.
Parkland also owns a refinery in Burnaby, BC, (just east of Vancouver), that is the only refinery on Canada’s Pacific Coast. The 55-Mb/d Burnaby refinery is a small, niche refinery that supplies petroleum products to the Vancouver market, and Sunoco has committed to continuing to invest in the facility. While it may not supply all of the greater Vancouver area, it can provide gas products to the local region without having to ship to more distant (and therefore lower-netback) markets. Crude oil deliveries (and crude throughputs) to the refinery (as shown in the chart below) have been quite consistent over the past several years.
The deal is still awaiting approval under the Investment Canada Act, which considers foreign investments in Canadian businesses.
