Investing.com -- Sunoco LP (NYSE:SUN) announced Friday it will acquire Parkland Fuel Corporation (TSX:PKI) in a cash-and-equity deal valued at approximately $9.1 billion, including debt, marking one of the largest North American fuel distribution transactions in recent years. The deal unites Sunoco’s U.S. infrastructure with Parkland’s Canadian retail and refining assets, creating the largest independent fuel distributor in the Americas.
As part of the agreement, Sunoco will establish SUNCorp, LLC, a new publicly traded Delaware entity that will issue units economically equivalent to Sunoco’s current common units. Parkland shareholders will receive C$19.80 in cash and 0.295 SUNCorp units per share, implying a 25% premium based on the companies’ seven-day volume-weighted average prices.
“This is a transformational combination that brings together two industry leaders with complementary platforms,” Sunoco said in a statement. The company expects more than 10% accretion to distributable cash flow per unit and $250 million in run-rate synergies by year three.
To fund the cash portion of the offer, Sunoco has arranged for a $2.65 billion bridge loan. The transaction has received unanimous approval from both boards and is expected to close in the second half of 2025, pending regulatory and shareholder approvals.
The combined network will span the U.S., Canada, Puerto Rico, Mexico, and parts of Europe, broadening Sunoco’s geographic footprint and increasing resilience to regional volatility. The acquisition also includes Parkland’s low-carbon Burnaby Refinery, which Sunoco has pledged to continue upgrading.
Sunoco plans to keep Parkland’s Calgary headquarters and maintain Canadian employment levels, a move likely aimed at addressing foreign takeover scrutiny under Canada’s Investment Canada Act. The deal arrives ahead of Parkland’s annual meeting, where activist pressure had been mounting for strategic alternatives.
The transaction follows Parkland’s strategic review and prevails over an earlier $8.1 billion proposal Sunoco made in 2023. The higher premium and earlier board resistance suggest Parkland saw value in the improved terms.
Despite the announced synergies and strategic alignment, Sunoco shares slid 1.6% in premarket trading following the news. Investors may be weighing near-term dilution and integration risks against long-term scale and cash flow gains.
Related articles
Sunoco to acquire Parkland for $9.1 billion in cross-border energy tie-up
JPMorgan upgrades Wendy’s to Overweight amid a ’fresh look at the equity story’
3G Capital to acquire Skechers USA, stock surges
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.