A Pioneer gas station.DANIEN HAYDUK/The Canadian Press
The Competition Tribunal has granted a partial, temporary injunction on a merger of fuel-selling companies Parkland Fuel Corp. and Pioneer Group Inc., while allowing Parkland to move ahead with its expansion plans.
The Competition Tribunal is still mulling whether Parkland's deal to acquire 319 gas stations in Ontario and 74 in Manitoba should be allowed to proceed in a few communities. But the Red Deer, Alta.-based company has enough direction to proceed with closing the acquisition soon.
This is the first time that the tribunal has ruled partly in the Competition Bureau's favour when it sought an injunction to require merging businesses to hold and operate assets separately.
In September last year, Parkland said it would acquire the assets from Pioneer Group and Suncor Energy Inc. for $378-million in a bid to expand operations in Ontario. Parkland pledged to trim its holdings in 10 areas where properties overlapped with its target, while expressing a view that competition wasn't likely to be affected either way.
The bureau has since filed two applications with the tribunal relating to the deal. The first one, on April 30, requested an order to stop both parties from proceeding with the tie-up in 14 communities – 11 in Ontario and three in Manitoba – in an effort to protect consumers from higher gas prices.
Then on May 12, the bureau challenged the merger again by seeking an injunction requiring Parkland to operate its own retail gas assets and make sure Pioneer's gas assets would also be run independently in the 14 communities until the tribunal reaches a decision. This interim order was proposed under section 104 of the Competition Act, which stops parties from moving ahead to close a deal until the outcome of the review is decided.
Wednesday's decision is related to the later application. The tribunal said that, until it delivers its final decision, both companies must own and operate their retail gas assets separately in six of the 14 communities where the bureau proposed the sale be prohibited – Bancroft, Kapuskasing and Tillsonburg in Ontario, and Neepawa, Lundar and Warren in Manitoba. The tribunal declined to issue an injunction in the remaining eight communities in the bureau's application.
Although the Tillsonburg area was not among those Parkland had stated its intention to divest, the decision was good enough for Parkland to declare they would move ahead with their deal.
"We are pleased that this decision permits us to proceed with the acquisition of Pioneer, a critical growth opportunity for Parkland," Bob Espey, chief executive officer of Parkland, said in a statement. "We intend to comply fully with the spirit and the letter of the tribunal's decision, and to pursue active discussions with the Competition Bureau as requested by the tribunal."