Archived — Competition Bureau acts to preserve competition in Suncor / Petro-Canada merger
OTTAWA, July 21, 2009 — The Competition Bureau announced today that it has reached a consent agreement with Suncor Energy Inc. and Petro-Canada, requiring them to divest 104 retail gas stations in southern Ontario and to sell storage and distribution network capacity in the Greater Toronto Area for 10 years.
The consent agreement addresses the Bureau's concerns that the merger would lessen competition substantially, which could have led to increased gasoline prices.
"We believe that we have secured a very positive outcome for consumers," said Melanie Aitken, Interim Commissioner of Competition.
"Requiring the companies to sell retail outlets will lead to increased competition by independent retailers who can expand their market presence. In addition, the parties' commitment to sell terminal space in the Greater Toronto Area is important to promoting a competitive dynamic in that market."
In particular, the companies will sell gas stations in markets in which the Bureau concluded that the merger would have had lessened competition substantially. Under the terms of the agreement, the companies will also sell approximately 1.1 billion litres of terminal storage and distribution capacity, annually, to be used for wholesale distribution during a 10-year period at their terminals located in the GTA. The merged company must also supply 98 million litres of gasoline each year, for 10 years, to independent gasoline marketers.
Significant mergers in Canada require a review by the Competition Bureau under the Competition Act to ensure that they will not result in a substantial lessening of competition. The merger review process involves collecting information from, and conducting interviews with, a wide range of industry participants, including the parties, suppliers, competitors, industry associations, customers and industry experts.
On March 23, 2009, Suncor Energy Inc. and Petro-Canada announced the companies planned to merge to create an entity with an estimated market value of $43.3 billion. The full text of the consent agreement filed with the Competition Tribunal will be available on the Tribunal's Web site when registered.
The Competition Bureau is an independent enforcement agency that contributes to the prosperity of Canadians by protecting and promoting competitive markets and enabling informed consumer choice.
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