Sunoco LP is set to acquire Parkland Corporation in a significant cash-and-stock deal valued at about $9.1 billion. This acquisition will create the largest independent fuel distributor in North America, allowing Sunoco to expand its operations and market presence.
Deal Details
Parkland shareholders will receive C$19.80 in cash and 0.295 units of a new entity called SUNCorp LLC for each Parkland share. This offer is a 25% premium over Parkland’s recent average share price.
Shareholders can also choose to take C$44.00 per share in cash or 0.536 SUNCorp units per share, but this will be adjusted to keep the total payout within set limits. The deal is expected to close in the second half of 2025, pending approvals from shareholders, courts, and regulators.
SUNCorp LLC will operate as a publicly traded company in Delaware, with its units being similar to Sunoco’s common units.
For two years after the deal closes, SUNCorp unitholders will receive dividends that match Sunoco’s distributions, ensuring ongoing value for investors.
Why This Matters
This acquisition aims to create a strong player in fuel distribution. It combines Sunoco’s extensive network in the U.S. with Parkland’s nearly 1,860 retail gas stations in Canada. Parkland’s well-known brands, like Ultramar, Esso, and Chevron, along with its On the Run convenience stores, will enhance Sunoco’s business and reach.
Sunoco expects the deal will quickly increase its distributable cash flow by over 10% and create more than $250 million in annual savings within three years.
The company plans to keep Parkland’s Canadian headquarters in Calgary, maintain jobs, and invest in important assets like the Burnaby Refinery, which supplies 25% of British Columbia’s transportation fuel and leads in low-carbon fuel production.
Background
This deal follows a review by Parkland amid pressure from its largest shareholder, Simpson Oil, and activist investor Engine Capital.
Parkland’s board and a special committee of independent directors fully support the agreement, highlighting its value and benefits for shareholders. Parkland will hold its annual meeting to approve the deal on June 24, 2025.