Roughnecks construct a drilling rig in an oil area on the MEG Vitality website close to Fort McMurray, Alberta, Canada.
Michael S. Williamson | The Washington Put up | Getty Photographs
Canadian oil and fuel producer Cenovus Vitality mentioned on Friday it should purchase MEG Vitality 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 corporations in Canada.
The 2 corporations, which is able to mix MEG’s Christina Lake oil sands operations in Alberta with Cenovus’ neighboring property, may have a mixed oil sands manufacturing of over 720,000 barrels per day.
MEG Vitality in June rejected a hostile takeover provide from Strathcona Assets, calling the bid insufficient and never in the perfect curiosity of its shareholders, and launched a strategic evaluate to discover higher options.
James McFarland, chairman of MEG Vitality, mentioned on Friday its board and a particular committee have “concluded that the proposed transaction with Cenovus represents the perfect strategic various” after contemplating Strathcona’s unsolicited provide and interesting with a number of events.
Strathcona Assets 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’ provide.
Cenovus’ provide of C$27.25 per share offers MEG an fairness worth of about C$6.93 billion, in accordance with Reuters calculations. It represents a 27.9% premium to MEG’s final shut earlier than Strathcona launched an unsolicited bid in Might.
Below the deal, MEG shareholders will obtain 75% of the consideration in money and 25% in Cenovus shares.
The deal, authorized by MEG’s board, is anticipated to shut early within the fourth quarter of 2025.
