Sunoco LP (SUN) has entered into an agreement with Parkland Corp. (PKI) to acquire the company in a $9.1 billion deal, paving the way for creating the largest independent fuel distributor in the U.S.
Sunoco’s stock was down more than 6% at the time of writing, while Parkland’s shares gained over 8.5%.
Dallas-headquartered Sunoco is a fuel distributor and an operator of energy infrastructure.
Parkland is a Calgary-based company that operates gas stations. It is Canada’s largest independent fuel retailing company.
Parkland’s executive chairman, Michael Jennings, called the deal a “compelling outcome” for the company’s shareholders.
Parkland’s shareholders will get CAD$19.80 ($14.25) in cash and 0.295 Sunoco shares for each share held in the company.
“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,” said Parkland CEO Bob Espey.
The Parkland deal is expected to result in $250 million in annual cost savings by the end of the third year. Sunoco said it would also boost cash flow by 10%.
Sunoco expects the deal to close in the second half of 2025, subject to closing conditions, assent from Parkland’s shareholders, and regulatory approvals.
The company said it had secured a $2.65 billion 364-day bridge loan for the cash consideration.
Earlier in 2024, Sunoco acquired NuStar Energy, an operator of fuel storage and pipelines, in a deal valued at $7.3 billion.
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