Co-op Acquires Husky Fuel Retail Sites of Western Canada in $ 264 Million Deal | The Canadian News

Federated Co-operatives Limited (FCL) has marked its largest retail acquisition in the cooperative’s history.

On Tuesday, FCL announced an agreement with Cenovus Energy Inc. to purchase 181 Husky fuel retail sites in an investment on behalf of local cooperatives for a total of $ 264 million.

Procurement fuel sites include gas rods, on-site car washes, and convenience stores at locations throughout Western Canada.

FCL said during a virtual press conference on Tuesday that the move will strengthen the presence of cooperatives in western Canada and bring its unrivaled service and support to new geographic areas.

“By leveraging our network of gas rods, FCL is able to increase the use and capacity of the Co-op Refinery Complex in Regina and the Ethanol Co-op Complex near Belle Plaine, Sask,” FCL CEO said Tuesday. , Scott Banda.

“Members of the cooperative will also benefit from this acquisition, as any increase in profitability is shared with the members of the cooperative and those returns help build the communities of Western Canada.”

Banda also noted that the investment puts FCL in a position to move forward with initiatives such as the transition to a low-carbon economy, indicated by recent announcements highlighting planned investments in carbon capture and renewable diesel production.

“We are committed to improving the sustainability of our fuels and recognize the important role cooperatives play in responding to the needs of our communities, members and customers.”

FCL will transfer the sites to several independent local cooperatives once the deal is complete.

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According to Banda, FCL partnered with Parkland Corporation to rebuild the accepted offer. This came after Husky announced in 2019 that they would be putting assets up for sale.

The sale will see 337 sites sold between Parkland and FCL for a total amount of $ 420 million. 156 of those sites will go to Parkland for $ 156 million.

The Calgary-based company says it will sell 156 of the retail fuel stations to Parkland Corporation for $ 156 million.

Tony Van Burgsteden, vice president of finance at FCL, pointed out how it was a three-year process between starts and stops and negotiations stalled in 2020 due to the COVID-19 pandemic.

He said that once Husky and Cenovus announced a merger that was finalized in early 2021, the assets returned to the market in late summer 2021.

“There were pretty quick negotiations from then on and a tremendous amount of work on the part of all parties involved,” Van Burgsteden said.

FCL says the purchase is subject to certain customary closing conditions, including a review by the Canadian Competition Office. Banda said this is a necessary step considering the scale of the transaction.

The review will also determine which sites will remain within the transaction or the provisions that FCL will have to make.

FCL expects the deal to close probably in mid-2022.

What does this mean for the members of the cooperative?

Banda said a main focus of this deal is to become more competitive in areas of the country that Co-op has yet to touch.

He discussed how the size of this acquisition will allow Co-op to grow and create opportunities in Saskatchewan, in addition to preserving FCL’s retail network.

“All of that boosts FCL’s economy overall, and if we can be more profitable as a group, then we can distribute more sponsorship to local cooperatives and ultimately individual members,” explained Banda.

The FCL CEO added that it is also about growing the brand and the system while filling the retail gaps that are particularly felt in Alberta and British Columbia.

“This agreement strikes a positive balance between the current and future needs of our Western Canadian customers.”