Calgary, Alberta-based Suncor Energy announced on Monday that it has reached an agreement to sell its Petro-Canada Lubricants Inc. business to a subsidiary of HollyFrontier Corporation for gross proceeds of CAD1.125 billion (USD839.4 million), subject to customary closing adjustments.
HollyFrontier is a U.S.-based independent petroleum refiner headquartered in Dallas, Texas, with operations throughout the mid-continent, southwestern and Rocky Mountain regions. Subsidiaries of HollyFrontier produce and market gasoline, diesel, jet fuel, asphalt, heavy products and specialty lubricant products.
The sale includes Petro-Canada Lubricants’ production and manufacturing centre in Mississauga, Ont., Canada, and the global marketing and distribution assets held by Petro-Canada Lubricants, including its global offices. Under the terms of the agreement, HollyFrontier will continue to operate the lubricants business under the Petro-Canada trademark.
“Today’s announcement is another example of how Suncor is focusing on its core assets through strategic acquisitions and divestitures that reinforce our commitment to long-term profitable growth,” said Steve Williams, president and chief executive officer.
“Petro-Canada Lubricants is a valuable, high-performing business that has been recognised by customers around the globe for its innovative products. When we announced we were considering divesting of the lubricants business, we had significant interest and as such we were able to transact with a company that fully recognises the value of the business.”
The transaction is subject to customary closing conditions, including satisfaction of all regulatory requirements in Canada and in the U.S., and is expected to close in the first quarter of 2017.
HollyFrontier CEO George Damiris said, “Our vision is basically to double the size of our company by the year 2020, plain and simple.” The acquisition of Petro-Canada Lubricants has doubled HollyFrontier’s lubricants business.
Following the sale of Petro-Canada Lubricants, Suncor said that it plans to sell all or parts of its wind power assets in Ontario, but planned to hold onto its wind generation capacity in Alberta and Saskatchewan.