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Parkland Fuel buying Chevron’s Canadian downstream fuel unit
Posted on Wednesday, 19 April 2017 14:23
Toronto-listed fuel wholesaler Parkland Fuel has signed on the dotted line to acquire Chevron Canada R&M.
Under the terms of the transaction, the buyer will pay around CAD 1.46 billion (USD 1.09 billion) for the business, which operates Chevron’s integrated downstream fuel business.
In addition, it will provide a further USD 186.00 million in working capital for the acquired unit.
The assets being picked up include 129 Chevron-branded retail service stations in Vancouver, 37 commercial cardlock and three marine fuelling locations and a refinery and terminals in Burnaby, Hatch Point and Port Hardy.
Completion of the deal remains subject to certain conditions and regulatory approvals and is slated to occur during the final quarter of this year.
Parkland is buying the downstream fuel unit as it enables it to become the exclusive distributor of Chevron-branded fuels, while increasing its annual volume by 2.50 billion litres and securing its position as the largest fuel retailer in Canada by site count.
The buyer said it will retain key members of the target’s management team upon closing.
Parkland has announced a separate share issue, through which it will sell 24.00 million stocks at CAD 27.70 each to accredited investors in a bought deal private placing.
Proceeds of that deal will be used to finance the acquisition of Chevron Canada R&M.
This is not the only deal in the Canadian fuel sector to have been announced lately; earlier today Loblaw Companies agreed to sell its network of retail petrol stations in the country to Brookfield Business Partners for around CAD 540.00 million.
Parkland Fuel describes itself as one of the fastest-growing independent fuel and petroleum product marketers in North America, delivering gasoline, diesel, propane and lubricants, among other products, to both individual and business customers.
The firm posted sales and operating revenue of CAD 6.27 billion in 2016, down from CAD 6.30 billion over the preceding 12 months.
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