Sunoco (SUN) and Canada-based Parkland Corp. (PKI) announced an agreement May 5 in which Sunoco will acquire all outstanding shares of Parkland for about US$9.1 billion (CA$12.56).

The deal, which includes assumed debt, positions Sunoco for expanded operations across a larger service area.

As part of the acquisition, Sunoco will establish a publicly traded entity named SUNCorp LLC in Delaware. Under the terms of the agreement, Parkland shareholders will receive 0.295 SUNCorp units and CA$19.80 (US$14.35) in cash per share.

Sunoco’s operations include wholesale fuel distribution and retail convenience stores. Parkland is an international fuel distributor, marketer and convenience retailer with operations in twenty-six countries in North and South America.

Sunoco projects the transaction will be immediately accretive, generating more than 10% growth in distributable cash flow per unit and delivering US$250 million (CA$345 million) in annual run-rate synergies within three years.

SUNCorp will ensure its unitholders receive equivalent dividends to Sunoco common unit holders for at least two years following the transaction’s close, according to the announcement.

Shareholders can also elect an all-cash payment of CA$44.00 (US$31.89) or 0.536 SUNCorp units per share.

Sunoco has secured a US$2.65 billion (CA$3.66) 364-day bridge term loan to fund the cash part of the acquisition. The deal has received unanimous approval from both boards of directors and is expected to close in the second half of 2025.

The combined entity will enhance Sunoco’s supply chain, broaden its geographic reach, and significantly boost cash flow, supporting long-term growth and capital reinvestment, according to the announcement.

Sunoco emphasized a commitment to maintaining Parkland’s Canadian presence, including keeping its headquarters in Calgary.

Advisers for the acquisition included Barclays and RBC Capital Markets for Sunoco. Barclays and RBC Capital Markets also provided financing. Stikeman Elliott LLP, Weil, Gotshal & Manges LLP and Vinson & Elkins LLP acted as Sunoco's legal advisers.  

Goldman Sachs Canada Inc. and BofA Securities served as financial advisors to Parkland. BMO Capital Markets acted as financial advisor to Parkland's Special Committee. Norton Rose Fulbright Canada LLP acted as Parkland's legal advisor. Torys LLP acted as legal advisor to Parkland's Special Committee. 

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