Shell Canada Maintains Branding in Sobeys Deal

Sells 236 sites in Quebec and Atlantic Canada

NOVA SCOTIA -- Sobeys Inc. closed this past week on its purchase of 236 gas stations and related convenience stores in Quebec and Atlantic Canada in a deal with Shell Canada, as reported in a Morgan Keegan/CSP Daily News Flash Friday.

“The gasoline brands in these new locations will remain Shell Canada, but we will see some convenience outlets switched over to Needs stores,” Sobeys spokesperson Andrew Walker told the Chronicle Herald.

The food giant announced in December 2011 it had struck a purchase deal with Shell Canada, but the closing required regulatory approval.

“We are delighted that this transaction is now complete, and we look forward to working with Shell and our dealer network to grow this business moving forward,” Bill McEwan, president and CEO at Sobeys, said in a news release.

Workers at the Shell locations were not expected to be affected by the transaction, but Walker said consumers will likely notice a change in the convenience outlets to receive the Needs brand.

“Needs locations provide a robust offering, which should be appreciated by consumers,” said Walker.

There is a possibility some of the Shell stations obtained by Sobeys will close.

This was raised back in December, when Sobeys executives participated in a conference call with investment analysts and discussed the transaction.

At that time, Sobeys CFO Paul Jewer said a rationalization exercise was already under way to determine which of the Shell stations were in good enough shape to warrant some required capital improvements, the newspaper reported.

Shell Canada was to continue to supply the bulk of the service stations acquired in the deal in Quebec.

The new owner was reported to be looking for a fuel supplier for Atlantic Canada.

Stellarton, Nova Scotia-based Sobeys is a wholly owned subsidiary of Empire Company Ltd. Sobeys owns more than 1,300 stores in 10 provinces.

A Shell Canada executive said the company is looking forward to working with Sobeys as a commercial partner in eastern Canada.

“This is an exciting day for Shell’s retail business, as we welcome a company that is a leader in the grocery, wholesale and retail convenience business,” said Sydney Kimball, Shell Canada retail general manager.

“I am confident, that together with Sobeys as our new commercial partner, the Shell brand will grow in Quebec and the Maritimes, and we’ll continue to provide customers with superior quality fuel products, lubricants and services.”