Competition Bureau addresses concerns over Ultramar gas stations purchase
The federal competition enforcement agency ruled convenience giant Couche-Tard could only purchase Ultramar if it sold assets to gas distributor Parkland, and Parkland in turn must sell supply contracts to competitors
OTTAWA—The Competition Bureau, Canada’s federal business competition enforcement agency, announced June 27 that it has reached agreements to address an imbalance in competition in the gasoline retail industry.
The Bureau has worked to rectify issues associated with Alimentation Couche-Tard Inc.—which operates convenience stores and gas stations across Canada under the Couche-Tard and Mac’s brands—and its purchase of CST Brands Inc.—the owner of the Ultramar brand—along with Couche-Tard’s subsequent sale of the majority of CST’s Canadian assets to Parkland Industries Ltd.—a gasoline and diesel distributor.
The Bureau concluded that, if allowed to proceed, Couche-Tard’s proposed acquisition of CST would likely result in a substantial lessening of competition in numerous local markets in Ontario, Quebec, Nova Scotia, New Brunswick, Prince Edward Island, and Newfoundland and Labrador.
To address this concern, Couche-Tard agreed to sell 366 gas stations and gasoline supply contracts to Parkland and one gas station to Quebec’s Philippe Gosselin & Associés Ltd.
As a result of the transaction with Parkland, Couche-Tard will receive approximately $985 million and will be still be adding 157 company-operated sites across its network in Quebec, the Atlantic provinces and Ontario.
With respect to the sale of assets to Parkland, the Bureau concluded that a lessening of competition in several markets in Ontario was likely.
In those markets, Parkland agreed to sell nine gasoline supply contracts to MacEwen Petroleum Inc. or McDougall Energy Inc.
Under the “Competition Act”, the Bureau has a mandate to review mergers to determine whether they are likely to result in a lessening or prevention of competition.
The Bureau says it is confident that these agreements will address the competition concerns identified and support the objective of preserving competition and fair retail gasoline prices for Canadians.
“Competition in the gasoline industry is an area of significant interest to Canadian consumers. The Competition Bureau does not hesitate to take action, when appropriate, to address competition concerns in this important sector,” said John Pecman, commissioner of Competition, the Competition Bureau.