BRAMPTON, Ontario, and TORONTO -- Loblaw Cos. Ltd. and Brookfield Business Partners LP have entered into a definitive agreement for Brookfield to acquire all 213 of Loblaw's gas stations and associated convenience kiosks adjacent to Loblaw-owned grocery stores across the country for approximately $540 million Canadian ($401.8 million U.S.).
Brookfield is entering into an agreement with Imperial Oil to rebrand the gas station portfolio to the Mobil fuel brand. This will mark the introduction of the Mobil fuel brand in Canada, building on its profile as a premier gas station brand in the United States with deep presence across key markets.
"Our investment in Loblaw's leading portfolio of gas stations presents an opportunity to own a business with significant scale, strong customer loyalty and compelling opportunities for further growth," said Cyrus Madon, CEO of Brookfield Business Partners, Toronto. "This transaction aligns with our strategy of owning and adding value to high-quality businesses with solid long-term fundamentals in sectors we know well. We look forward to working with Loblaw to enhance and grow the current network of gas stations."
The gas stations will continue to offer Loblaw's PC Plus loyalty program, combining the loyalty proposition that customers associate with Loblaw with the experience the Mobil brand offers in other markets.
"In Brookfield, we have a strategic partner with an experienced management team and a strong business track record," said Sarah Davis, president of Loblaw, Brampton, Ontario. "They are committed to preserving and growing the elements of the business that matter most to our customers—high-quality fuel service and convenience along with PC Plus loyalty benefits. This is a positive outcome for our customers, our gas station operators and our company."
The parties said that the transaction remains subject to customary closing conditions, and they expect it to close in third-quarter 2017.
Loblaw is one of Canada’s largest retailer and the majority unitholder of Choice Properties Real Estate Investment Trust. It provides Canadians with grocery, pharmacy, health and beauty, apparel, general merchandise, banking and wireless mobile products and services.
Brookfield Business Partners is a business services and industrial company focused on owning and operating businesses that benefit from barriers to entry or low production costs.