HollyFrontier in advanced talks to buy Suncor Energy's Petro-Canada lubricants unit for $1 bn
24 October 2016
US oil refiner HollyFrontier Corp is in advanced talks to buy Suncor Energy's Petro-Canada lubricants unit for around $1 billion, Reuters yesterday reported, citing people familiar with the matter.
Petro-Canada, which was looking to reduce its C$15 billion debt that was accumulated after it recently spent more than $7 billion on acquisitions and development of its existing assets, hired Bank of America Corp in June to assist in the sale of its lubricants unit.
Petro-Canada had acquired its lubricants unit in 1985 from Gulf Canada, while Calgary, Alberta-based Suncor merged with Petro-Canada in 2009.
Mississauga, Ontario-based Petro-Canada Lubricants, blends and packages more than 350 different lubricants, specialty fluids and greases that are exported to more than 80 countries on six continents.
Petro-Canada Lubricants specialises in products ranging from heavy duty engine oils to hydraulic fluids, automatic transmission fluids and gear oils and greases.
Taking advantage of the global decline in oil prices, Suncor, this year acquired Canadian Oil Sands for $4.24 billion and agreed to pay about $937 million to buy an additional five per cent stake in its Syncrude oil sands joint venture from Murphy Oil Corp's Canadian unit for C$937 million.
Last week, it also announced plans of raising about $2.5 billion in equity by selling 71.5 million of its shares. The offering is expected to close on Wednesday.
With a market cap of nearly $4.2 billion Dallas-based HollyFrontier operates five refineries with 443,000 barrels per day of total throughput capacity.