Sunoco’s proposed acquisition of Parkland Corporation will face added federal scrutiny amid heightened Canada-U.S. trade tensions, according to legal experts interviewed by the Canadian Press.

Ottawa is now reviewing the proposed $9.1-billion friendly takeover of Calgary-based Parkland by the American fuel distributor. The recently announced deal comes at a time when Canada-U.S. relations are strained, and resource nationalism is on the rise.

“The timing of this acquisition, even though Parkland was soliciting offers, may be unlucky for them in that there will be, rightly or wrongly, more attention focused on it,” Jennifer Quaid, a corporate law professor at the University of Ottawa, told CP. “It’s an American acquisition in a sector that we are paying a lot of attention to right now.”

Parkland operates about 4,000 gas stations and electric-vehicle charging sites across Canada, the U.S., and the Caribbean. The company also owns the On the Run convenience-store chain and M&M Food Market, along with a refinery in Burnaby, B.C.

The review considers whether foreign investments would benefit the country or pose national security risks.

The federal government recently updated its national security guidelines under the Investment Canada Act. These updates focus on assessing potential harm to Canada’s economic security, including the size of the Canadian business and its impact on the country’s supply chains.

François-Philippe Champagne contended in his former role as industry minister that the rapidly shifting trade environment could lead to business-value declines, leaving Canadian firms vulnerable to opportunistic or predatory foreign investors.

Mélanie Joly, the minister now responsible for overseeing the Investment Canada Act review told reporters that she expects to be briefed on the takeover in the coming days.

According to Camden Hutchison, a UBC corporate law professor, it is highly unusual for the federal government to reject a takeover.

“That said, given the political sensitivity of a large U.S. acquisition of a Canadian energy company at this time, I expect there’ll probably be more political attention given to the review, and I think that the review itself will probably be more rigorous.”

The deal, which includes a 25% premium for Parkland shareholders, will be put to a vote on June 24. Parkland has stated that Sunoco has committed to safeguarding Canadian jobs, retaining its Calgary headquarters, and investing in Canada.

Unifor, the union representing workers at Parkland’s Burnaby refinery, has called for the federal and provincial governments to secure binding commitments from Sunoco.

“This is not the time to hand over control of critical energy infrastructure to a foreign multinational, especially in the middle of a trade war,” Lana Payne, Unifor’s national president, told CP.

Pictured: On the Run convenience store.

Photo: Parkland

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