Cenovus Vitality Inc. agreed to purchase MEG Vitality Corp. in a deal valued at about C$7.9 billion ($5.7 billion) together with debt, beating a bid from Strathcona Assets Ltd. to spice up its place amongst Canada’s high oil producers.
The transaction, valuing MEG at C$27.25 a share, is break up three-quarters money and 1 / 4 inventory, Cenovus stated Friday in a press release. The corporate expects the acquisition to shut within the fourth quarter, topic to regulatory and shareholder approvals.
The takeover unites two Calgary-based companies with important operations within the oil-sands area of northeastern Alberta. MEG’s Christina Lake challenge contains 200 sq. kilometers (77 sq. miles) of leases within the oil-rich space, and the corporate has regulatory approvals to supply round 210,000 barrels a day.
A few of MEG’s buyers had panned the roughly C$6 billion hostile proposal from oil tycoon Adam Waterous’ Strathcona as too low. MEG, which pumps about 100,000 barrels of crude a day, is among the final corporations within the trade sufficiently small to be taken over however giant sufficient to vault the acquirer up within the ranks of the nation’s main producers.
Again in Could, Royal Financial institution of Canada analyst Greg Pardy stated Cenovus was “probably the most logical match” to take over MEG as a result of it additionally operates in Christina Lake, providing higher potential working synergies than different attainable patrons.
The third-largest Canadian crude producer by stock-market worth, Cenovus produced the equal of about 800,000 barrels of oil a day final 12 months – principally bitumen, together with pure fuel liquids and a few typical oil and fuel.
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