By Robb M. Stewart

Sunoco is expanding its reach with a $9.1 billion deal to buy Canada's Parkland, bringing with it a fleet of gas stations and a west-coast refinery.

The companies said Monday they reached a definitive agreement that will see Parkland shareholders receive a mix of cash and shares.

Sunoco has made a number of commitments with its offer to continue investing in Canada, including a pledge to maintain Parkland's Canadian headquarters in Calgary, Alberta, and significant employment levels in the country.

Parkland has been under pressure from its biggest shareholder and in March agreed to review its current business strategy and to look at opportunities that could include a tie-up, divesting assets or a sale of the company.

A strategic combination with Sunoco offers a compelling outcome for Parkland shareholders and will position the combined company as the largest independent fuel distributor in the Americas, Chairman Michael Jennings said. Jennings and the rest of Parkland's board are unanimously recommending shareholders accept the deal.

Under the terms of the agreement, Sunoco will form a new publicly-traded unit named SUNCorp that will hold limited partnership units of its parent that will be equivalent to Sunoco shares. Parkland shareholders will be offered 19.80 Canadian dollars, the equivalent of $14.33, plus 0.295 of a SUNCorp unit for each Parkland share, or they alternatively they can elect to receive C$44 per Parkland share in cash or 0.536 of a SUNCorp unit for each Parkland share.

The cash and equity transaction is valued at about $9.1 billion, including debt. Parkland's shares last closed at C$36.28, up 12% so far in 2025 but down roughly 10% over the last 12 months. The company

Family-owned company Simpson Oil, which has a roughly 20% stake in Parkland, was challenging Parkland with its a slate of director nominations who were up for a vote at Parkland's annual investor meeting Tuesday. Simpson last week said it had the support of a majority of Parkland's shareholders and that it expected its nominees to hold a majority of the seats on the Calgary company's board.

Parkland's long-serving chief executive, Bob Espey, last month said he was stepping down in an effort to pacify Simpson, which had called for an overhaul at Parkland that including a change of CEO and a refreshed board.

Sunoco's takeover deal is subject to approval by Parkland's shareholders at a vote set for June 24. Tuesday's annual shareholder meeting has been cancelled, and will instead be held the same day as the vote.

Parkland's Jennings said that in addition to committing to safeguarding Canadian jobs, Sunoco will continue to invest in Parkland's refinery in Burnaby, British Columbia, and in the company's plans to expand its Canadian transportation energy infrastructure. The combined company's expanded free cash flow will provide additional resources for reinvestment in Canada, the Caribbean, and the U.S., he said.

Parkland has a network of roughly 4,000 fuel and retail locations across Canada, the U.S. and the Caribbean. Sunoco, a master limited partnership, operates in over 40 U.S. states, Puerto Rico, Europe and Mexico, and runs about 14,000 miles of pipeline and over 100 fuel terminals.

Sunoco, which has secured a $2.65 billion 364-day bridge term loan for the proposed cash consideration, said the deal with Parkland will immediately boost distributable cash flow per unit and will bring in $250 million in ongoing savings by the third year of the combination. The tie-up also will diversify its portfolio and geographic footprint, and allow it to accelerate its growth.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

May 05, 2025 08:14 ET (12:14 GMT)

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