Canada-based Parkland Fuel has entered into an agreement to acquire supermajor Chevron’s downstream fuel business in Canada for $1.1 billion, Kallanish Energy reports.
The transaction amount also includes payment of an estimated $186 million in working capital for the acquired business.
As part of the deal, Parkland will acquire 129 Chevron-branded retail service stations mainly located in Metropolitan Vancouver, British Columbia (B.C.), and 37 commercial cardlock and three marine fueling locations.
The deal also includes a 55,000 barrel-per-day refinery in Burnaby, terminals located in Burnaby, Hatch Point, and Port Hardy, all in B.C., and a wholesale business which includes aviation fuel sales to Vancouver International Airport.
“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,” said Bob Espey, president and CEO of Parkland.
The Chevron-branded retail service stations are expected to complement Parkland’s existing 44 Chevron-branded sites in B.C.
Following the completion of the transaction, Parkland will be the exclusive distributor of Chevron-branded fuels, adding over 2.5 billion liters (660.43 million gallons) 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.
BofA Merrill Lynch, TD Securities and National Bank Financial acted as financial advisors to Parkland in the transaction, while McCarthy Tétrault served as its legal advisor.