Canada Antitrust Watchdog Seeks to Kibosh Keyera Deal for Plains' Canada Gas Business — 3rd Update

By Paul Vieira

OTTAWA--Canada's antitrust watchdog said Tuesday it is seeking to quash Keyera's proposed deal for Plains All American Pipeline's Canadian natural-gas business on worries the acquisition would entrench control over critical energy infrastructure.

The Competition Bureau said the planned $3.7 billion transaction would reduce competition at a crucial natural-gas liquids-processing hub in Fort Saskatchewan, Alberta. The bureau said Canadian producers rely on that hub to process natural-gas liquids into specific products, and to store them.

Natural-gas liquids are a byproduct of natural gas. Ethane, propane and butane are all considered natural-gas liquids, and are used as inputs for petrochemical plants, and cooking and heating. They are also blended in with gasoline for automobiles.

The Keyera-Plains deal would reduce the number of major integrated service providers at the hub from three to two, the bureau said. "There is insufficient remaining competition to constrain a post-merger exercise of market power by Keyera," lawyers for the bureau said in a filing to the Competition Tribunal, Canada's antitrust judicial body. "Increased market power would allow Keyera to raise prices for producers, reduce choice, and offer worse contractual terms."

In a statement, Keyera said Canadian authorities informed the company of the legal challenge prior to the opening of markets on Tuesday. The company said it disagrees with the bureau's "assertions and characterization of the transaction, and intends to respond." It promised a more detailed statement later Tuesday.

Both Keyera and Competition Bureau officials said there is nothing preventing the company from closing its agreement with Plains. However, the future of a post-deal Keyera is contingent on winning a favorable ruling from the Competition Tribunal. In theory, the tribunal could reject the bureau's application; could allow the Keyera-Plains deal to proceed so long as Keyera agrees to sell certain assets; and, finally, could order the dissolution of the Keyera-Plains transaction. Lawyers for Keyera and Plains have 45 days to file their responses, according to the bureau's filing.

A spokesperson for Plains didn't respond to a request for comment.

Shares in Keyera were down in the Toronto stock market about 4.2% Tuesday, while Plains' stock price was about flat in Nasdaq trading.

Canadian policymakers have encouraged a more rigorous interpretation of antitrust laws amid criticism that a concentration in key industries has limited competition and weighed on the country's productivity. Last week, Canada's Finance Minister Francois-Philippe Champagne ordered government departments to remove policies that impede competition.

Keyera's planned takeover, unveiled in June of last year, would establish a natural-gas-liquids corridor in Canada for the company, with assets that include extraction, fractionation and storage operations, as well as rail and truck terminals in Alberta, Saskatchewan, Manitoba and Ontario. The company has said the move would allow it to be more competitive in the services it offers and in terms of reliability, while bringing an opportunity to cut costs.

When the deal was unveiled, Keyera championed how this deal represented a win for Canada, because the acquisition from U.S.-based Plains would bring key natural-gas infrastructure under domestic ownership.

In March, Keyera and Plains said the closing of the planned deal was taking longer than anticipated.

Write to Paul Vieira at paul.vieira@wsj.com

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May 05, 2026 13:20 ET (17:20 GMT)