Sunoco Buys Canadian Gas Station Operator Parkland For $9 Billion

U.S. fuel giant Sunoco (SUN) has announced that it is buying Canadian gas station operator Parkland (PKI) for $9.1 billion U.S.In a joint news release, Sunoco and Parkland said that the acquisition will create the largest independent fuel distributor in North America. Based in Calgary, Alberta, Parkland operates retail gas stations under the Esso, Ultramar, Chevron, and Pioneer brands. The company also holds the rights to the convenience store brand “On the Run” in Canada and most areas of the U.S. Parkland is the largest independent fuel retail company in Canada and the second-largest convenience store operator in the country.Parkland put itself up for sale following a strategic review. The company had been under pressure to increase shareholder value from activist investor Engine Capital, as well as Simpson Oil, its largest stockholder which holds a nearly 20% stake.Under terms of the takeover, Parkland shareholders will receive C$19.80 (US$14.33) in cash and 0.295 Sunoco units for each Parkland share they own. For Sunoco, the purchase of Parkland is its second major deal in recent years. In 2024, Sunoco acquired fuel storage and pipeline operator NuStar Energy for $7.3 billion.The Parkland acquisition is expected to close in the second half of this year and deliver over $250 million U.S. in annual cost savings by the third year following the takeover. Sunoco said the transaction will boost its cash flow by more than 10% and that the two companies will distribute more than 15 billion gallons of fuel annually. News of the takeover sent Parkland’s stock up 8% on May 5, while Sunoco’s stock fell 7%. Parkland’s stock has declined 6% over the last 12 months to trade at $38.28 a share in Toronto.