On June 27, the Competition Bureau announced that it had cleared Alimentation Couche-Tard Inc.’s acquisition of CST Brands, Inc. (the owner of the Ultramar brand), and the subsequent sale of the majority of CST’s Canadian assets to Parkland Industries Ltd. (see the Bureau press release). This concludes the Bureau’s lengthy review of the transactions, which were announced in the third quarter of 2016.
Each transaction is subject to a consent agreement, which the Bureau concluded will address the competition concerns it alleged were associated with the transactions. Pursuant to the consent agreements: (i) Couche-Tard agreed to sell 366 gas stations and gasoline supply contracts to Parkland, and one gas station to Philippe Gosselin & Associés Limitée; and (ii) Parkland agreed to sell nine gasoline supply contracts to MacEwen Petroleum Inc. or McDougall Energy Inc. and certain of its own assets to MacEwen in two other markets where the Bureau alleged competition issues.
The retail gas industry has experienced significant consolidation, and has been an area of focus for the Bureau in recent years, including both price-fixing investigations and extensive merger reviews related to: (i) Pioneer’s sale of 393 gas stations to Parkland (see the Bureau statement); (ii)Imperial Oil Ltd.’s sale of 497 Esso brand gas stations to five separate purchasers (see the Bureau statement); and (iii) Le Groupe Harnois inc.’s acquisition of Distributions Pétrolières Therrien Inc.’s gasoline supply arrangements (see the Bureau statement). Several of these transactions resulted in remedies being ordered pursuant to consent agreements.
The Couche-Tard and Parkland transactions were somewhat unique, as they were announced on the same day, and at the time of announcement, Parkland noted that the number of sites it would acquire was to be determined following the Bureau’s review of the Couche-Tard / CST transaction. The consent agreements, particularly when considered together with the long duration of the Bureau’s review of the transactions, make clear that the retail gasoline market is an enforcement priority for the Bureau, and that retail gasoline mergers involve an extensive, market-by-market analysis.