CALGARY, Alberta — Imperial Oil inked agreements with five companies to buy its entire retail division, consisting of 497 company-owned Canadian Esso-branded convenience stores. The combined sales price is $2.8 billion in Canadian dollars (approximately $2.1 billion in U.S. dollars), with the transactions expected to close by the end of the calendar year, subject to regulatory approvals.
“We believe these agreements represent the best way for Imperial to grow in the highly competitive Canadian fuels marketing business,” said Rich Kruger, chairman, president and CEO of Imperial. “The Esso brand has a leading presence in Canada through our distributor network and strong prospects for continued growth to the benefit of our customers and shareholders.”
Purchasing the Esso-branded locations will be Alimentation Couche-Tard Inc., 7-Eleven Canada Inc., Harnois Groupe, Parkland Fuel Corp. and Wilson Fuel Co. Ltd.
Couche-Tard, parent of the Circle K brand, will purchase 279 of the c-stores, 229 of which are located in Ontario and 50 in Québec. The Laval, Québec-based retailer will pay $1.686 billion for these 279 stores, which will be financed from its available cash and existing credit facilities.
"Since our acquisition of Silcorp in 1999, we have been looking for an opportunity for a further transformative acquisition in Canada. Today, we are happy to announce our agreement with Imperial for 279 Esso sites in Ontario and Québec. Esso is a great brand and a strong partner, and we look forward to expanding our relationship with them," said Brian Hannasch, president and CEO of Couche-Tard. "The opportunity to combine some of the strongest brands in Canada to create a great offer and experience for our customers is very exciting.
"The sites we would acquire represent an excellent strategic fit for our business, allowing us to expand our network and reach more fuel customers than ever before,” he continued.
7-Eleven Canada will purchase 148 c-stores located in British Columbia and Alberta, including the metropolitan areas of Vancouver, Calgary and Edmonton. The retailer already operates more than 500 stores in Canada.
"The acquisition of these prime locations will increase our presence in western Canada and build on 7-Eleven's already strong brand recognition in the country," said Stan Reynolds, 7-Eleven's executive vice president, chief administrative officer and chief financial officer. "This acquisition is an important step in continuing the company's growth as the world's largest convenience retailer."
Parkland Fuel will purchase sites in Saskatchewan and Manitoba. "Parkland continues its strategy of being a disciplined acquirer that focuses on accretive opportunities that drive shareholder value. I am pleased that our team has successfully negotiated this purchase at an attractive valuation," said Bob Espey, Parkland's president and CEO.
Harnois Groupe will purchase c-stores and gas stations in Québec, while Wilson Fuel will acquire sites in Nova Scotia and Newfoundland.
Calgary-based Imperial Oil is Canada’s largest petroleum refiner.