OTTAWA, Ontario -- The Canadian Competition Bureau has reached separate agreements with Alimentation Couche-Tard Inc. and Parkland Industries Ltd. to address competition concerns arising from Couche-Tard’s purchase of CST Brands Inc. and the sale of the majority of CST’s Canadian assets to Parkland.
These agreements preserve competition in the retail sale of gasoline in Ontario, Quebec, Nova Scotia, New Brunswick, Prince Edward Island and Newfoundland and Labrador, the bureau said.
Couche-Tard obtained clearance from the Federal Trade Commission (FTC) for the acquisition of CST earlier this week. The companies expect the transaction to close June 28. Following the review by the FTC, Couche-Tard has agreed to sell 70 sites to Dallas-based Empire Petroleum Partners LLC.
Following the review by the Competition Bureau and a consent agreement reached with the Commissioner of Competition, and in compliance with an agreement signed with Parkland, Parkland will be purchasing from Couche-Tard the majority of CST's Canadian assets located in Quebec, the Atlantic provinces and Ontario: 100% of CST's commercial cardlock business, 100% of CST's commercial and home energy business, substantially all of CST's dealer and commissioned agents business, 159 of CST's company-operated stores and CST's Montreal corporate head office.
As a result of the transaction with Parkland, Couche-Tard will receive approximately $755.4 million and will be adding 157 company-operated sites across its network in Quebec, the Atlantic provinces and Ontario.
Couche-Tard’s proposed acquisition of CST would likely result in a substantial lessening of competition in the aforementioned local markets, it said. To address this concern, Couche-Tard agreed to sell 366 gas stations and gasoline supply contracts to Parkland and one gas station to Philippe Gosselin & Associes Ltd.
In the subsequent sale of assets to Parkland, the bureau concluded that a substantial lessening of competition in several markets in Ontario was likely. In those markets, Parkland agreed to sell nine gasoline supply contracts to MacEwen Petroleum Inc. or McDougall Energy Inc. In addition, there are two other markets where the bureau found that Parkland was not a suitable purchaser. In the latter, Parkland also divested certain of its own assets to MacEwen, prior to the bureau entering into either of the consent agreements.
“The bureau is confident that these agreements will address the competition concerns identified and support the objective of preserving competition and fair retail gasoline prices for Canadians,” it said.
Red Deer, Alberta-based Parkland delivers gasoline, diesel, propane, lubricants, heating oil and other petroleum products to customers in Canada and the United States. It also owns Minot, N.D-based SPF Energy Inc., the holding company for Superpumper Inc. and Farstad Oil Inc. Superpumper owns and operates 21 convenience stores in North Dakota, Minnesota and Montana under the Superpumper and SPF brands.
CST Brands, San Antonio, has more than 2,000 locations throughout the southwestern United States, Georgia, Florida, New York and eastern Canada. It also owns the Ultramar fuel brand.
Laval, Quebec-based Couche-Tard's network includes 8,081 convenience stores throughout North America, including 6,710 stores selling motor fuel, mostly under the Circle K, Kangaroo Express, Mac's and Couche-Tard banners. Its North American network consists of 15 business units, including 11 in the United States covering 41 states and four in Canada covering all 10 provinces.
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