UPDATE 1-Suncor begins auction of lubricants business -sources

Thu Jun 16, 2016 5:28pm EDT
 
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(Adds Suncor, Bank of America declining comment, paragraph 4)

By Mike Stone

June 16 (Reuters) - Suncor Energy Inc has launched an auction of its Petro-Canada lubricants division, whose white mineral oils are sprayed on gummy bear candy to make it shiny and prevent sticking, people familiar with the matter said.

The sale could fetch around $800 million and help Canada's biggest energy company pay down debt incurred by recent acquisitions, the sources said this week.

Calgary, Alberta-based Suncor, which merged with Petro-Canada in 2009, is working with Bank of America Corp on the sale process, said the sources, asking not to be identified because the matter is confidential.

Representatives for Suncor and Bank of America declined to comment.

Petro-Canada is the world's largest manufacturer of white mineral oil, which is used in health and beauty products, pharmaceuticals, adhesives, plastics and elastomers.

Suncor has been acquiring companies during the two-year slump in oil prices. It spent C$4.24 billion ($3.32 billion) to purchase Canadian Oil Sands in March. In April, it agreed to pay about C$937 million to buy an additional 5 percent stake in its Syncrude oil sands joint venture from Murphy Oil Corp's Canadian unit.

Petro-Canada purchased its lubricants business in 1985 from Gulf Canada. The unit, based in Mississauga, Ontario, near Toronto, produces more than 350 advanced lubricants for industries ranging from beauty to heavy manufacturing.   Continued...