CALGARY, Alberta -- In a multibillion-dollar deal that stunned analysts, Imperial Oil has reached agreements with five fuel distributors in Canada to sell its remaining 497 company-owned Esso gas stations for a total of approximately $2.8 billion Canadian ($2.08 billion U.S.).
Companies purchasing the sites:
- Alimentation Couche-Tard Inc. is purchasing 279 sites in Ontario and Quebec for approximately $1.686 billion Canadian ($1.257 billion U.S.).
- 7-Eleven Canada Inc. is purchasing 148 sites in Alberta and British Columbia for an undisclosed amount.
- Harnois Groupe Pétrolier is purchasing 36 sites in Quebec for an undisclosed amount.
- Parkland Fuel Corp. is purchasing 17 sites in Saskatchewan and Manitoba for an undisclosed amount.
- Wilson Fuel Co. Ltd. is purchasing 17 sites in Nova Scotia and Newfoundland for an undisclosed amount.
“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 Oil. “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.”
As reported in a McLane/CSP Daily News Flash, more than 1,700 Esso gas stations currently operate in Canada.
The On the Run/Marché Express convenience-store franchise will continue to operate at select gas stations within the Esso network under the ownership and management of Parkland Fuel.
Esso’s marketing and loyalty programs will continue unchanged, the company said.
In January 2015, Calgary, Alberta-based Imperial Oil—which is majority-owned by Exxon Mobil—said it was evaluating the “potential transition” of its remaining gas stations in Canada to a branded wholesaler operating model. In May 2015, it began to accept proposals from interested bidders.
BMO Capital Markets analyst Randy Ollenberger told The Calgary Herald that Imperial received a “great price. A lot higher than I was expecting.”
Analyst Greg Pardy of RBC Capital Markets said in a report cited by the newspaper that the price was “leaps and bounds” above his initial estimate of between $500 million and $1 billion.
CIBC World Markets analysts had expected the Esso stations to fetch between $800 million and $1.2 billion, said the report.
Imperial Oil is Canada’s largest petroleum refiner and a leading fuels marketer from coast to coast.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.