The US$9.1-billion ($1.45-trillion) acquisition of Parkland Corporation by Sunoco LP is getting closer to being realised after clearing a key USA regulatory hurdle.

Both fuel companies announced on Monday that the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act) had expired. That legislation limits certain integration activities from being executed until authorities deem that a merger or acquisition won’t harm competition.

Parkland Corporation is a Canadian company which acts as an international fuel distributor, marketer, and convenience retailer in 26 countries across the Americas. The company supplies lubricants in the Jamaican market under Sol Petroleum and distributes Texaco with Techron fuels to the Jamaican network of Texaco branded and licensed service stations under Gulfstream Petroleum S.R.L. or the GB Group.

Parkland also has operations in 23 other Caribbean countries which includes Sol and On the Run convenience stores and operation of different service stations under its retail business. This includes brands like Esso, Mobil, Shell, Texaco and Sol. The company’s commercial and wholesale business delivers and supplies gasoline, diesel, fuel oil, propane and lubricants to different sectors and provision of aviation fuel at 14 airports.

Parkland and Sunoco announced the acquisition on May 5 which will see the creation of the largest independent fuel distributor in the Americas. If the deal is completed, Parkland shareholders would receive a combination of cash and/or equity as consideration for the acquisition. The general offer to Parkland shareholders is CA$19.80 in cash and 0.295 SunCorp units, but any shareholder can elect to receive CA$44 in cash or 0.536 SunCorp units for each Parkland share surrendered. SunCorp is the name of the new publicly traded Delaware company which will hold limited partnership units that are economically equivalent to Sunoco’s publicly traded units on a one-for-one basis.

Parkland shareholders voted at an annual and special meeting on June 24 where 93 per cent of votes were in favour of the Sunoco acquisition. Mariame McIntosh Robinson, former chief executive officer of First Global Bank Limited (FGB), was one of ten directors elected to hold office until the next annual meeting. McIntosh Robinson was appointed a director of Parkland in March 2024 when the company sought to refresh its board of directors.

“We continue to estimate the close date to be sometime in the fourth quarter. Since we announced the Parkland acquisition three months ago, we’re even more confident that we will deliver on the acquisition economics. Parkland’s base business is solid and improving. In fact, Parkland announced yesterday a record second quarter showing that they have improved materially from their 2024 results. Combining the two companies will be a win for equity holders, debt holders, employees, as well as the countries we operate in,” said Joseph Kim, president and chief executive officer of Sunoco LP in an August 6 earnings call.

Other regulatory hurdles include the Investment Canada Act, Competition Act, Canada Transportation Act and other material foreign antitrust and investment law approvals. Sunoco completed a US$1.5 billion private cumulative redeemable perpetual unit offer and a US$1.90 billion senior note offering on September 4 in conjunction with this deal. Sunoco had already secured a US$2.65 billion one-year bridge loan for the proposed cash transaction when the deal was initially announced.

Sunoco LP is a Delaware company that acts as a leading energy infrastructure and fuel distribution master limited partnership in over 40 US states, Puerto Rico, Mexico and Europe. The company also distributes fuel to over 7,400 branded Sunoco service stations across the United States of America (USA). Sunoco executed a partnership with West Indies Petroleum Limited (WIP) on January 1 which is aimed at positioning Jamaica as a major marine fuel hub in the Caribbean.

According to the joint presentation by Parkland and Sunoco, the deal is expected to create US$250 million in run-rate synergies by the third year after the deal is completed. The combined business would also produce US$1 billion in annual free cash flow and handle 15 billion gallons of fuel across the Americas. Parkland generated CA$28.30 billion in revenue for 2024 and CA$127 million in consolidated net profit but had CA$1.69 billion in adjusted EBITDA (earnings before interest, tax, depreciation and amortisation). Sunoco had US$22.69 billion in revenue for 2024 and US$874 million in consolidated net profit with US$1.46 billion in adjusted EBITDA.