Petro-Canada & Suncor Merger

Issue Date: CSP Daily News, June 8, 2009,

Petro-Canada, Suncor Shareholders Approve Merger
Deal is subject to regulatory approvals, Competition Board review

CALGARY, Alberta -- At their respective annual meetings, Petro-Canada and Suncor Energy Inc. shareholders approved plans that will result in the merger of the two Canadian companies and certain of their subsidiaries: 96% of the Petro-Canada shareholders present voted for the merger; 98.07% of the Suncor shareholders at the meeting voted in favor of the merger.

The deal, first announced in March, is subject to all regulatory approvals and review by the Canadian Competition Bureau. The merged company will keep the Suncor name and will retain the Petro-Canada retail brand. (Click here for previous CSP Daily News coverage.)

"Shareholders recognized that the merger between Petro-Canada and Suncor would create Canada's premier integrated energy company with the assets, cost structure and financial strength to compete globally," said Ron Brenneman, Petro-Canada's president and CEO.

"This is a great vote of confidence from our shareholders," said Rick George, president and CEO of Suncor, who will assume the same role in the merged company. "Creating a made-in-Canada company that can compete on a global scale is good for shareholders and good for Canada. We anticipate that our two companies will be able to realize efficiencies and opportunities neither of us could have realized on our own. With an integrated business model we expect to have a global leadership position in the oil sands industry, a strong Canadian downstream brand, an attractive portfolio of domestic and international oil and natural gas assets, and numerous growth opportunities through the combined inventory of Suncor and Petro-Canada's potential development projects."

Click here for addition leadership changes.

At Petro-Canada, shareholders approved a new stock option plan by more than 52% of the votes cast, which will bring together the plans of Suncor and Petro-Canada and be used to attract and retain highly qualified directors, officers and employees. At Suncor, 57.67% of the votes cast were in favor of the new stock option plan.

Both companies elected 11 board members, including 10 independent directors until the earlier of either the completion of the merger or the next annual general meeting. These individuals are also proposed board members for the new merged company.

Petro-Canada also appointed Deloitte & Touche LLP as its auditors; Suncor appointed PricewaterhouseCoopers LLP.

Calgary, Alberta-based Petro-Canada is one of Canada's largest oil and gas companies, operating in both the upstream and the downstream sectors of the industry in Canada and internationally.

Suncor is an integrated energy company also headquartered in Calgary. Along with its upstream operations, it operates a refining and marketing business in Ontario with retail distribution under the Sunoco brand. U.S. downstream assets include pipeline and refining operations in Colorado and Wyoming and retail sales in the Denver area under the Phillips 66 brand. Suncor Energy (U.S.A.) Inc. is an authorized licensee of the Phillips 66 brand and marks in the state of Colorado. Sunoco in Canada is separate and unrelated to Sunoco in the United States, which is owned by Sunoco Inc., Philadelphia.

Bilibala's comments:
Once it got approved by the regulator, the merged company will become the largest intergated oil & gas company in Canada. To me, this deal is more in favour to Suncor than to Petro Canada. Both company stock price go up a lot after the annoucement of the merge. I will stay away from them until I review the 1st two merged financial statements.