US-based Sunoco LP announced on May 5 that it has entered into a definitive agreement to acquire all outstanding shares of Canadian company Parkland Corporation, in a transaction valued at $9.1bn including assumed debt. The deal will be settled through a combination of cash and equity and will lead to the creation of a new publicly listed structure, SUNCorp, LLC.
Creation of a new tax-listed entity
SUNCorp will be established as a Delaware limited liability company and will hold units of Sunoco that are economically equivalent to the company’s publicly traded common units. Each SUNCorp shareholder will receive the same dividend distribution as Sunoco unit holders, guaranteed for two years following the close of the transaction. SUNCorp will be treated as a corporation for tax purposes, potentially offering a more efficient structure for certain investors.
Terms of the offer to Parkland shareholders
Under the agreement terms, Parkland shareholders will receive 0.295 SUNCorp units and CAD19.80 for each Parkland share, representing a 25% premium based on the 7-day volume-weighted average prices as of May 2. Alternatively, shareholders may elect, subject to proration, to receive CAD44.00 in cash per share or 0.536 SUNCorp units per share.
Transaction financing and regulatory approvals
To fund the cash portion of the offer, Sunoco has secured a 364-day bridge term loan facility totalling $2.65bn. The financing will support the committed cash payouts while maintaining stable closing conditions. The boards of directors of both companies have unanimously approved the transaction.
The closing is expected in the second half of 2025, pending approval by Parkland’s shareholders and customary regulatory and stock exchange clearances.
