Competition Bureau OK's Suncor, Petro-Canada merger
The Competition Bureau has given the merger of Suncor Energy Inc. and Petro-Canada its stamp of approval, provided the companies sell 104 gas stations in southern Ontario.
With the transaction clearing a key hurdle on Tuesday, the two Calgary-based companies say they now intend to make their merger final on Aug. 1.
"Our focus now is to get the final pieces in place to close the deal and launch what will be Canada's premier energy company," said Suncor chief executive Rick George, who will head what will soon be the largest Canadian energy firm.
The agreement to sell gas stations allays concerns that the merger would undermine competitiveness in the Ontario market, and increase pump prices as a result.
"We believe that we have secured a very positive outcome for consumers," Melanie Aitken, interim commissioner of competition, said in a statement. "Requiring the companies to sell retail outlets will lead to increased competition by independent retailers who can expand their market presence."
After the merger, Suncor plans to sell gasoline under the iconic Petro-Canada brand.
Petro-Canada has a network of more than 1,300 retail outlets across Canada, whereas Suncor only had a handful of Sunoco-branded stations in southern Ontario.
The Competition Bureau is also requiring Suncor and Petro-Canada to sell to rivals about 1.1 billion litres annually of Toronto-area fuel storage and distribution capacity, during a 10-year period.
They must also, for a decade, supply 98 million litres of gasoline each year to independent gasoline marketers.
George called the bureau's review process "very intensive and thorough."
Merger plans announced in March
Suncor and Petro-Canada announced in March that they would merge to create Canada's largest energy producer, worth more than $43 billion.
The merged company will be among the largest energy names in North America, and would rival Royal Bank of Canada as the largest company by market capitalization listed on the Toronto Stock Exchange.
Suncor is the oldest and second largest producer in the oilsands, behind the Syncrude Canada Ltd. consortium, in which Petro-Canada has a 12 per cent interest. Suncor will eclipse Syncrude as the largest oilsands name once it takes on Petro-Canada's assets at Fort Hills and MacKay River.
The competition bureau news release was issued after the close of stock trading Tuesday. Earlier, Suncor shares rose $1.01 to close at $36.20, a gain of almost three per cent on the TSX. Petro-Canada shares jumped $1.25 to $46.15.