Competition Bureau reaches agreement with propane retailer Superior
Propane retail sites to be sold in western Canada, northern Ontario and the Northwest Territories.
September 27, 2017 – OTTAWA, ON – Competition Bureau
The Competition Bureau announced today that it has reached an agreement with Superior Plus LP to address competition concerns in the retail sale of bulk propane arising from its proposed acquisition of Canwest Propane from Gibson Energy ULC.
The Bureau’s review found that the merger would have led to a substantial price increase for many consumers, including those who depend on propane to heat their homes and run their businesses, especially in rural areas.
When merging, companies may gain efficiencies in their operations, which can lower their costs and generate real resource savings for the Canadian economy. In this case, the Bureau concluded that, if allowed to proceed, the efficiency gains resulting from the transaction would likely not clearly and significantly outweigh the effects of the substantial lessening of competition in 12 local markets.
To address those concerns, Superior has agreed to sell retail propane sites and associated assets in these 12 markets in western Canada, northern Ontario and the Northwest Territories.
The Bureau is confident that this agreement will preserve competition in the retail sale of bulk propane in these markets.
"Propane is a necessary energy source to many Canadian households and businesses. Our review of the proposed merger concluded that Superior’s acquisition of Canwest would likely have resulted in consumers paying higher prices for propane in western Canada, northern Ontario and the Northwest Territories. We are pleased that the Bureau was able to work together with Superior and Canwest to find a solution that addresses our concerns."
Senior Deputy Commissioner, Mergers and Monopolistic Practices Branch
There is an efficiency exception in the Competition Act that allows an assessment of the trade-off between anti-competitive effects and efficiencies. If the Bureau's review concludes that efficiencies gained as a result of the transaction are likely to clearly and significantly outweigh the anti-competitive effects, the Bureau may decide not to oppose the merger on these grounds.
On February 13, 2017, Superior and Gibson Energy ULC announced that they had reached an agreement whereby Superior would acquire Canwest, Gibson’s retail propane business.
Superior is a provider of portable fuels, equipment and services delivered locally to residential, commercial, agricultural and industrial customers.
Canwest is headquartered in Calgary and operates local branches providing propane supply, services and equipment in western Canada, northwestern Ontario, and the Northwest Territories.
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