Competition Bureau challenges Parkland’s Pioneer deal
Review concludes that post-merger market shares would be too strong Ontario and Manitoba communities.
OTTAWA — A deal by Parkland Fuel Corp. to acquire gas station operator Pioneer Energy for $378-million is being challenged by the federal Competition Bureau.
The bureau said in a statement that it has filed an application with the Competition Tribunal for an order prohibiting the two companies from proceeding with the transation in 14 communities – 11 in Ontario and three in Manitoba.
“The bureau will also be seeking an injunction requiring that Parkland preserve and operate independently the assets to be acquired from Pioneer in these communities until the Tribunal reaches its decision in this matter,” it said.
A review by the bureau concluded that the parties’ post-merger market shares in the 14 communites would be between 39 and 100%.
“As these markets become more concentrated, the likelihood of price co-ordination between remaining retailers increases,” it said.
“As we were not able to come to an agreement with Parkland and Pioneer to resolve our concerns, we are seeking to block the merger in these communities in order to protect competition for Canadians,” it added.
Under the cash and stock deal announced in September, Parkland said it would acquire 181 Pioneer corporate stations and 212 supply agreements in Ontario and Manitoba.
One of Pioneer’s current joint owners, the Pioneer Group Inc., would receive $76 million or 39% of its total consideration in cash and $119 million or 61% of Parkland shares. The other owner, Suncor Energy Inc. would get $183 million in cash.
At the time, Parkland said the Pioneer business represented 5.1% of total retail fuel sales across Canada and a 12% share of the Ontario and Manitoba retail markets.
Parkland operates or supplies close to 700 retail gas stations in Canada under the Fas Gas Plus, Race Trac Gas and Esso brands.
Pioneer operates under the Pioneer, Esso and Top Valu brands.
© 2015 The Canadian Press