Eagers Automotive Secures 65% Stake in CanadaOne Auto Group for C$2.145 Billion
Eagers Automotive Limited is set to acquire a controlling 65% interest in CanadaOne Auto Group in a transaction valued at C$2.145 billion, with closing anticipated in early 2026.
- Eagers to acquire 65% of CanadaOne Auto Group
- Transaction valued at C$2.145 billion with share and cash consideration
- Priestner Group retains 35% ownership post-acquisition
- Closing expected in Q1 2026, subject to regulatory approvals
- Governance structured via Unanimous Shareholders Agreement with detailed board and shareholder rights
Strategic Acquisition in Canadian Automotive Retail
Eagers Automotive Limited, a prominent player in the automotive retail sector, has announced a significant acquisition that will expand its footprint into the Canadian market. Through a wholly owned subsidiary, Eagers will acquire a 65% stake in CanadaOne Auto Group (COAG) by purchasing shares from the existing owners, collectively known as the Priestner Group. The deal values the transaction at a base purchase price of C$2.145 billion, subject to customary adjustments.
Complex Consideration Structure
The purchase price will be satisfied through a combination of issuing Class B Common Shares representing 35% ownership in the purchasing entity, Class C Preferred Shares valued at C$350 million, and a cash component for the remaining balance. The preferred shares are exchangeable for ordinary shares of Eagers, ensuring alignment of interests between the parties. This hybrid payment structure reflects a sophisticated approach to balancing equity dilution and cash outlay.
Governance and Shareholder Rights
Post-acquisition, governance will be governed by a Unanimous Shareholders Agreement that outlines board composition, special approval requirements, and transfer restrictions. The board will consist of five directors, with Eagers appointing three and the Priestner Group two, subject to ownership thresholds. The agreement also establishes put and call rights allowing orderly transfer of shares over time, with mechanisms to protect minority interests and ensure strategic control.
Regulatory and Closing Conditions
The transaction remains subject to several conditions precedent, including Canadian regulatory approvals under the Competition Act and Investment Canada Act, as well as approvals from the Australian Securities Exchange. The parties have agreed on customary pre-closing conduct restrictions and a break fee of $20 million should the deal fail due to a breach. Closing is anticipated in the first quarter of 2026, contingent on satisfying these conditions.
Implications for Eagers and the Market
This acquisition marks a strategic expansion for Eagers Automotive into the Canadian automotive retail sector, potentially enhancing its scale and market reach. The involvement of the Priestner Group as a significant minority shareholder suggests a collaborative approach to growth and integration. Investors will be watching closely how this deal impacts Eagers’ financial position, operational synergies, and long-term shareholder value.
Bottom Line?
As Eagers Automotive prepares to close this landmark acquisition, the market will be keenly observing the integration journey and regulatory milestones ahead.
Questions in the middle?
- How will the acquisition impact Eagers Automotive’s earnings and balance sheet in the near term?
- What operational synergies and efficiencies can be expected from integrating CanadaOne Auto Group?
- How might regulatory approvals or potential hurdles affect the timing and terms of closing?
