All eyes are on Alimentation Couche-Tard as oil giant Suncor announced the potential sale of its vast Petro-Canada network of stations earlier this week.
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In a statement released Monday, Suncor Energy announced that it has reached an agreement with Elliott Investment Management. Unsatisfied with Suncor’s performance, the militant American company, in particular, persuaded the Alberta company to consider selling its roughly 1,800 gas stations, nearly 1,600 of which are in Canada.
“As with any major transaction, we would expect[Alimentation Couche-Tard] To be part of any process affecting Suncor’s retail assets,” RBC Capital Markets analyst Irene Nattel wrote in a statement cited by the company financial post.
However, all experts agree that Couche-Tard, which operates more than 2,000 gas stations and convenience stores in Canada, could not acquire the entire Petro-Canada network.
If the company got its hands on Suncor’s stations, it would likely have to sell half of them to a competitor, Stifel GMP analyst Martin Landry said. Couche-Tard’s major North American rival, 7-Eleven, may also be interested in the network, which could sell for more than $10 billion, he noted.
In 2016, Couche-Tard acquired 279 of the 497 Esso gas stations listed for sale by Imperial Oil for $1.6 billion. Four other buyers shared the other stations.
The competition office will carefully review each transaction, stresses Pierre Larouche, professor of competition law at the University of Montreal.
“These are markets that are very local, so you almost have to search gas station for gas station,” he notes. If there are Petro-Canada and Shell stations at an intersection, that’s not a problem because the competitive situation isn’t going to change, but if there are Petro-Canada and Couche-Tard stations, it’s different.”
Beneficial for the consumer?
A possible transaction could worry consumers who have been suffering from the sharp rise in gas prices since the beginning of the year. However, it should be noted that in recent years it has mainly been refining margins that have increased, not retail margins.
“It’s not impossible [l’acquisition potentielle des stations de Suncor par Couche-Tard] either to the benefit of the consumer by giving couche-tard more purchasing power,” says Mr. Larouche.
Suncor’s thinking is part of a major trend that has prompted several oil companies to abandon the retail sector and focus on exploration, production, and refining.
“It makes sense for everyone,” says Pierre Larouche. Couche-Tard is better suited to run such facilities than an oil company.”