Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS NEWS: Canada Competition Bureau challenges gasoline retailer’s acquisition of competitor’s service stations, (May 1, 2015)

By Edward L. Puzzo, J.D.

The Canada Competition Bureau will challenge the proposed acquisition of certain Pioneer Petroleums assets by gasoline retailer Parkland Industries, the Bureau announced. Parkland currently operates or supplies nearly 700 retail gas stations in Canada under the “Fas Gas Plus,” “Race Trac Gas,” and “Esso” brands. Pioneer operates under the “Pioneer,” “Esso,” and “Top Valu” brands.

Parkland Industries, a subsidiary of Parkland Fuel Corporation, proposes to acquire 181 Pioneer corporate stations and 212 supply agreements in Ontario and Manitoba. The Competition Bureau’s concerns about higher gasoline prices resulting from the acquisition center on the effects the acquisition would have on seven communities in Ontario, and seven communities in Manitoba, where the post-merger market share of the merged entity would be between 39 and 100 percent. As these markets become more concentrated, the likelihood of price coordination between the remaining retailers increases, the Bureau stated.

"Taking action in this matter demonstrates the Bureau’s ongoing vigilance when it comes to the sale of retail gasoline,” Commissioner of Competition John Pacman said. “Our review concluded that Parkland’s acquisition of Pioneer could harm competition in the retail gasoline industry in certain communities in Ontario and Manitoba. As we were not able to come to an agreement with Parkland and Pioneer to resolve our concerns, we are seeking to block the merger in these communities in order to protect competition for Canadians."

The case is CT-2015-003.

Companies: Parkland Industries, Ltd.; Parkland Fuel Corporation; Pioneer Energy LP; Pioneer Petroleums Transport Inc.

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