Parkland to buy Chevron’s downstream fuel business in Canada
Parkland Fuel has entered into an agreement to acquire Chevron’s downstream fuel business in Canada for $1.1bn.
The transaction amount also includes payment of an estimated $186m in working capital for the acquired business.
As part of the transaction, Parkland will acquire 129 Chevron-branded retail service stations mainly located in Metro Vancouver and 37 commercial cardlock and three marine fueling locations.
Parkland will also acquire a complimentary a 55 thousand barrel per day refinery in Burnaby.
Besides, the acquisition includes terminals located in Burnaby, Hatch Point, and Port Hardy, British Columbia, and a wholesale business which includes aviation fuel sales to the Vancouver International Airport.
Parkland president and chief executive officer said: “This accretive acquisition further strengthens our supply-focused business model and adds significant scale with the premier Chevron retail brand and network in British Columbia.
"Parkland is acquiring a highly integrated business which adds significant supply infrastructure and logistics capability to support Parkland's existing operations.”
The Chevron-branded retail service stations are expected to complement Parkland's existing 44 Chevron-branded sites in British Columbia.
Following the completion of the transaction, Parkland will be the exclusive distributor of Chevron-branded fuels, adding over 2.5 billion litres of annual volume.
The transaction is subject to the receipt of customary third-party consents and regulatory approvals, including an approval from the Competition Bureau of Canada.
It is expected to be completed in the fourth quarter of 2017.
While BofA Merrill Lynch, TD Securities and National Bank Financial acted as financial advisors to Parkland in the transaction, McCarthy Tétrault served as its legal advisor.
Parkland is one of North America's largest marketers of fuel and petroleum products that include gasoline, diesel, propane, lubricants and heating oil, among others.
In August last year, it entered into an agreement to acquire the majority of the Canadian business and assets of CST Brands.
Image: Parkland will be the exclusive distributor of Chevron-branded fuels. Photo: courtesy of Vichaya Kiatying-Angsulee/Freedigitalphotos.net.