Green Light for Growth: Parkland and Sunoco Clear Major Regulatory Hurdle in US$1.57 Billion Deal

A significant milestone has been achieved in the energy sector as Parkland Corp., the Canadian fuel distribution powerhouse, and U.S.-based fuel distributor Sunoco LP, announced they have successfully navigated a crucial regulatory hurdle for Parkland's ambitious US$1.57 billion acquisition. This clearance marks a definitive step forward for the highly anticipated deal, which will see 250 convenience stores and gas stations across 10 U.S.

states change hands.

The transaction, initially unveiled in August 2023, involves Parkland acquiring a substantial portfolio of retail fuel and convenience sites from Sunoco. This move is poised to significantly expand Parkland's footprint in the lucrative U.S. market, adding considerable scale and diversification to its existing operations.

The key regulatory clearance comes from the U.S.

Federal Trade Commission (FTC), which had issued a 'second request' for information. Such requests are typically part of a rigorous antitrust review process, indicating the FTC's detailed examination of the potential impact of a merger or acquisition on market competition. The successful resolution of this request signals that the FTC has completed its review, removing a major barrier to the deal's completion.

For Parkland, this acquisition represents a strategic acceleration of its U.S.

growth strategy. The company already boasts a robust presence south of the border, operating under various brands including its proprietary 'On the Run' convenience store brand. Integrating an additional 250 sites will not only boost its retail network but also enhance its overall supply chain efficiencies and customer reach in key U.S.

regions.

Conversely, for Sunoco LP, the divestiture allows for a sharpened focus on its core wholesale fuel distribution business. By shedding its retail assets, Sunoco aims to streamline operations and further invest in its strengths as a leading supplier of fuel to independent dealers and partners across the United States.

With the FTC's approval secured, the transaction is now firmly on track to close in early 2024, contingent upon the satisfaction of other customary closing conditions.

This development is being met with optimism by both companies and market observers, as it paves the way for a more dynamic and competitive landscape in the U.S. fuel and convenience retail sector. The move underscores the ongoing consolidation and strategic recalibration within the energy distribution industry, as companies seek to optimize their portfolios for future growth and market leadership.