(Reuters) -Sunoco LP will buy Canada-based Parkland in a deal valued at about $9.1 billion, including debt, the U.S. fuel supplier said on Monday, in a move the companies said would create the largest independent fuel distributor in the Americas.
The deal follows Parkland’s strategic review, initiated in March, following persistent pressure from Simpson Oil, its largest shareholder with a nearly 20% stake, and supported by activist investor Engine Capital.
Simpson Oil did not respond to a Reuters request for comment.
Parkland shareholders will receive C$19.80 in cash and 0.295 Sunoco units for each Parkland share held.
Shares of Sunoco, which operates in wholesale fuel distribution and retail convenience, fell over 3% in morning trading, while those of Parkland rose nearly 8%.
The acquisition marks the company’s second major deal in recent years. In 2024, Sunoco acquired fuel storage and pipeline operator NuStar Energy in a $7.3 billion deal.
The Parkland deal is expected to close in the second half of the year and deliver over $250 million in annual cost savings by the third year.
Sunoco said the transaction will boost its cash flow by more than 10% and allow the combined company to return to its target debt levels within 12 to 18 months of closing.
To fund the cash portion, Sunoco has secured a $2.65 billion, 364-day bridge loan, a short-term facility often used to bridge financing gaps in large deals.
On a call with analysts, executives said the companies will distribute more than 15 billion gallons of fuel annually and strengthens their position across both wholesale and retail markets.
Sunoco will keep investing in Parkland’s Burnaby Refinery, which makes cleaner, low-carbon fuels, and run it for the long term to supply fuel to the Lower Mainland region in Canada.
(Reporting by Arunima Kumar in Bengaluru; Editing by Sriraj Kalluvila)
