Roughnecks construct a drilling rig in an oil discipline on the MEG Energy website close to Fort McMurray, Alberta, Canada.
Michael S. Williamson | The Washington Post | Getty Images
Canadian oil and gasoline producer Cenovus Energy mentioned on Friday it is going to purchase MEG Energy in a cash-and-stock deal valued at C$7.9 billion ($5.68 billion), together with debt, to create one of many largest oil sands firms in Canada.
The two firms, which can mix MEG’s Christina Lake oil sands operations in Alberta with Cenovus’ neighboring belongings, can have a mixed oil sands manufacturing of over 720,000 barrels per day.
MEG Energy in June rejected a hostile takeover supply from Strathcona Resources, calling the bid insufficient and never in the most effective curiosity of its shareholders, and launched a strategic evaluation to discover higher alternate options.
James McFarland, chairman of MEG Energy, mentioned on Friday its board and a particular committee have “concluded that the proposed transaction with Cenovus represents the best strategic alternative” after contemplating Strathcona’s unsolicited supply and interesting with a number of events.
Strathcona Resources didn’t instantly reply to a Reuters request for touch upon whether or not it was contemplating an enhanced bid or different choices in response to Cenovus’ supply.
Cenovus’ supply of C$27.25 per share provides MEG an fairness worth of about C$6.93 billion, in accordance to Reuters calculations. It represents a 27.9% premium to MEG’s final shut earlier than Strathcona launched an unsolicited bid in May.
Under the deal, MEG shareholders will obtain 75% of the consideration in money and 25% in Cenovus shares.
The deal, accredited by MEG’s board, is anticipated to shut early in the fourth quarter of 2025.