CALGARY, Alberta -- Suncor Energy Inc. and Petro-Canada said that the Competition Bureau of Canada has approved the proposed merger of Suncor and Petro-Canada. Under the consent agreement, the companies have agreed to take steps to maintain retail and wholesale competition in Ontario, including divesting 104 retail locations and entering into certain supply and throughput arrangements in Ontario for a period of 10 years.
With all the conditions necessary to complete the merger satisfied, Suncor and Petro-Canada intend to make the merger effective August 1, 2009.
"[image-nocss] The Bureau's review process was very intensive and thorough," said Rick George, who is currently president and CEO of Suncor and will assume the same role in the merged company. "We are satisfied that the resulting terms will preserve the expected benefits of the merger and maintain a competitive refined products market in Ontario."
He added, "With this major milestone behind us, 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 George.
The Competition Bureau in Ottawa reached a consent agreement with Suncor and Petro-Canada, requiring them to divest 104 retail gas stations in southern Ontario and to sell storage and distribution network capacity in the Greater Toronto Area.
The consent agreement addresses the Bureau's concerns that the merger would lessen competition substantially, which could have led to increased gasoline prices.
"We believe that we have secured a very positive outcome for consumers," said Melanie Aitken, Interim Commissioner of Competition. "Requiring the companies to sell retail outlets will lead to increased competition by independent retailers who can expand their market presence. In addition, the parties' commitment to sell terminal space in the Greater Toronto Area is important to promoting a competitive dynamic in that market."
In particular, the companies will sell gas stations in markets in which the Bureau concluded that the merger would have had lessened competition substantially. Under the terms of the agreement, the companies will also sell approximately 1.1 billion liters of terminal storage and
distribution capacity, annually, to be used for wholesale distribution during a 10-year period at their terminals located in the Toronto area. The merged company must also supply 98 million liters of gasoline each year, for 10 years, to independent gasoline marketers.
Significant mergers in Canada require a review by the Competition Bureau under the Competition Act to ensure that they will not result in a substantial lessening of competition. The merger review process involves collecting information from, and conducting interviews with, a wide range of industry participants, including the parties, suppliers, competitors, industry associations, customers and industry experts.
On March 23, 2009, Suncor Energy Inc. and Petro-Canada announced the companies planned to merge to create an entity with an estimated market value of $43.3 billion. The Competition Bureau is an independent enforcement agency that contributes to the prosperity of Canadians by protecting and promoting competitive markets and enabling informed consumer choice.
Suncor Energy Inc. is an integrated energy company headquartered in Calgary, Alberta. Suncor's oil sands business, located near Fort McMurray, Alberta, extracts and upgrades oil sands and markets refinery feedstock and diesel fuel, while operations throughout western Canada produce natural gas. Suncor also operates a refining and marketing business which includes refining, retail, pipeline and distribution operations in Ontario, Canada and in Colorado and Wyoming in the United States.
Suncor Energy (U.S.A.) Inc. is an authorized licensee of the Shell and Phillips 66 brand and marks in the state of Colorado. Sunoco in Canada is separate and unrelated to Sunoco in the United States, which is owned by Sunoco Inc., Philadelphia.
Calgary-based Petro-Canada is one of Canada's largest oil and gas companies, operating in both the upstream and the downstream sectors of the industry in Canada and internationally. The company creates value by responsibly developing energy resources and providing world class petroleum products and services.
Click here for further information on the Suncor and Petro-Canada merger.
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