Esso stations to be sold in deals worth $2.8B
An ESSO gas station in the Town of Mount Royal, Que., on Jan 4. 2007. (Peter McCabe / CP)
The Canadian Press
Published Wednesday, March 9, 2016 6:54AM EST
Last Updated Wednesday, March 9, 2016 9:41AM EST
CALGARY -- Imperial Oil says it has reached deals to sell its remaining 497 Esso retail stations in Canada to five fuel distributors for a total of $2.8 billion.
Alimentation Couche-Tard Inc. is set to buy 279 stations in Ontario and Quebec for nearly $1.69 billion.
Meanwhile, 7-Eleven Canada Inc. is buying 148 stations in Alberta and British Columbia, Harnois Groupe petrolier buying 36 in Quebec and Wilson Fuel Co. Ltd. buying 17 in Nova Scotia and Newfoundland.
Parkland Fuel Corp. says it will buy 17 Esso stations, and is also buying Imperial's On the Run/Marche Express convenience store franchise system.
Imperial (TSX:IMO), majority owned by U.S. energy giant ExxonMobil Corp., said it would continue to supply fuel to the stations and that the distributors would be better placed to increase sales.
"We believe these agreements represent the best way for Imperial to grow in the highly competitive Canadian fuels marketing business," said Imperial CEO Rich Kruger.
Roughly two-thirds of the 1,700 Esso stations across Canada have been operated by wholesalers for about 15 years, with the remainder of the Esso stations now set to follow the same model.
Imperial said Esso's marketing and loyalty programs will continue unchanged and the sales are expected to close by the end of 2016.
A spokeswoman for Imperial said the company will use the cash to fund its dividend and growth projects, as well as return cash to shareholders through share buy backs.