Imperial Oil evaluating future of its 500 gas stations
Imperial Oil Ltd. is thinking about selling 500 gas stations to partners who would continue to sell fuel under the Esso brand.
Roughly two-thirds of Imperial's 1,700 Esso stations across Canada have been operating under what it calls a "branded wholesaler'' model for about 15 years. The Calgary-based company said Wednesday it's looking into whether it makes sense to do the same with the remainder.
Imperial, majority owned by U.S. energy giant ExxonMobil Corp., would supply fuel to those stations. It will also look at growth opportunities for its On the Run convenience store banner.
Brad Merkel, vice-president of fuels and lubricants at Imperial, said it's too soon to say how much money the company could make from the sale. It's also too soon to say whether the stations will be sold in one fell swoop or through a series of deals.
READ: Couche-Tard buying The Pantry
"I would say we're not ruling anything out at this point in time,'' said Merkel.
"We have about 12 branded wholesale partners today and we expect that all of them might be interested in at least pieces of the business and we think there's parties out there that might be interested in all of it. We'll look at all of our options.''
The assessment should take about six to eight months, he added.
"We're looking for partners who really share our vision and are willing to invest in helping us to grow our business.''
READ: Sobeys sees future benefits in Quebec gas station deal
According to BMO analyst Peter Sklar, convenience store giant Alimentation Couche-Tard may be a prime candidate to acquire the Esso stations. Couche-Tard made news this past December after finalizing a US$1.7 billion deal to purchase The Pantry Inc. a leading U.S. convenience store operator with more than 1,500 locations.
In 2011 Sobeys scooped up 205 Shell stations across Quebec. The retailer then went on to strike a deal with American convenience merchandise and motor fuel giant CST where the pair swapped corner stores and gas stations. While CST acquired four Sobeys locations, they continued to sell Esso fuel and buy snack and fresh food from Sobeys. Sobeys in exchange was able to add five new Shell stations close to their existing IGA stores. They've since driven sales with several grocery store fuel discount programs, including their "Shop at Sobeys, Save at Shell" campaign which took place last summer.