CALGARY — U.S. energy company Sunoco LP has signed an agreement to buy Parkland Corp. in a cash-and-stock deal valued at US$9.1 billion, including assumed debt.
The deal comes as Calgary-based Parkland faces an attempt by Simpson Oil Ltd., its largest shareholder, to replace a majority of its board of directors.
Parkland cancelled its annual meeting set for Tuesday and rescheduled it to June 24, when shareholders will also be asked to approve the Sunoco deal.
Parkland executive chairman Michael Jennings said it is a compelling outcome for shareholders.
"The board unanimously recommends the proposed transaction, recognizing Sunoco's commitment to safeguarding Canadian jobs, retaining the Calgary head office, and further investing in Canada," Jennings said in a statement.
"This partnership creates significant financial benefits for shareholders and would position the combined company as the largest independent fuel distributor in the Americas."
Parkland and Cayman Islands-based Simpson have been at odds over the fuel refiner and retailer's performance and governance for about a year.
Simpson owns just under 20 per cent of Parkland's shares and wanted nine of its directors added to Parkland's board at a shareholder meeting, which has been postponed.
Under shareholder pressure, Parkland said in March it would review options to boost its share price, including a sale of the entire company. Earlier this month, longtime Parkland CEO Bob Espey announced plans to step down before year-end.
As part of the deal, Sunoco intends to form a new publicly traded company named SUNCorp LLC that will hold limited partnership units of Sunoco that are economically equivalent to Sunoco's publicly traded common units.
Parkland shareholders will receive 0.295 SUNCorp units and C$19.80 for each Parkland share. Parkland shareholders may also elect to receive C$44 per Parkland share in cash or 0.536 SUNCorp units for each Parkland share, subject to limits.
Parkland shares closed at C$36.28 on the Toronto Stock Exchange on Friday.
In addition to shareholder and court approvals, the deal is subject to regulatory approvals, including approval under the Investment Canada Act. Sunoco has committed to maintain a Canadian headquarters in Calgary and significant employment levels in Canada.
It has also committed to continuing to invest in Parkland's refinery in Burnaby, B.C.
This report by The Canadian Press was first published May 5, 2025.
Companies in this story: (TSX:PKI)
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