May 06, 2025 [Storage Terminals  Magazine]- Sunoco LP and Parkland Corporation have announced a definitive agreement under which Sunoco will acquire all outstanding shares of Parkland in a transaction valued at approximately $9.1 billion, inclusive of assumed debt. The deal will be executed through a combination of cash and equity.

As part of the acquisition, Sunoco intends to establish a new publicly traded Delaware limited liability company, SUNCorp, LLC. SUNCorp will hold limited partnership units of Sunoco that are economically equivalent to Sunoco’s common units, issued on a one-for-one basis. SUNCorp, which will be treated as a corporation for tax purposes, will ensure that for a two-year period post-closing, its unitholders receive dividend equivalents equal to distributions made to Sunoco unitholders.

Transaction Structure

According to the agreement, Parkland shareholders will receive 0.295 SUNCorp units and C$19.80 in cash per share, reflecting a 25 percent premium based on the seven-day volume-weighted average prices (VWAP) of both companies as of 2 May 2025. Alternatively, shareholders may elect to receive either C$44.00 in cash or 0.536 SUNCorp units per Parkland share, subject to proration to ensure the overall transaction consideration remains within the fixed cash and equity caps.

Sunoco has secured a $2.65 billion, 364-day bridge term loan to finance the cash portion of the transaction.

The boards of directors of both Sunoco and Parkland have unanimously approved the transaction, which is expected to close in the second half of 2025, subject to customary regulatory approvals, stock exchange listings, and approval by Parkland shareholders.

Strategic Rationale

Financially Compelling: The transaction is expected to be immediately accretive, delivering more than 10 percent accretion to distributable cash flow per Sunoco common unit. Additionally, it is forecast to generate $250 million in run-rate synergies by the third year, with a return to a 4x long-term leverage target anticipated within 12 to 18 months post-close.

Industrial Synergy: The acquisition brings together complementary assets, enhancing fuel supply capabilities and broadening Sunoco’s geographic footprint.

Growth Acceleration: The increased cash flow from the combined business is expected to fuel reinvestment and distribution growth.

Commitment to Canada and Responsible Growth

Sunoco has affirmed its commitment to maintaining a strong presence in Canada, including:

• Canadian Operations: A Canadian headquarters will be retained in Calgary, along with significant employment levels across the country.

• Burnaby Refinery: The company has pledged continued investment in Parkland’s Burnaby Refinery, which is known for its production of low-carbon fuels. Operations at the facility will be sustained and enhanced, ensuring safe and environmentally responsible performance.

• Energy Infrastructure Expansion: Sunoco will support Parkland’s strategy to grow its Canadian transportation energy infrastructure.

• Broader Investment Capacity: The combined company’s enhanced free cash flow will support further investment across Canada, the Caribbean, and the United States, facilitating the development of both existing operations and new initiatives.

The transaction marks a significant step in Sunoco’s strategic growth trajectory and reinforces its position as a leading player in the North American energy infrastructure landscape.

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