Husky shareholders will receive a roughly 21% premium to their shares, the companies said. Rows of steam generators at a Cenovus project in Alberta, Canada.
Photo: todd korol/Reuters
Canadian oil-sands producer Cenovus Energy Inc. and Husky Energy Inc., controlled by Hong Kong billionaire Li Ka Shing, agreed to merge in an all stock deal worth 3.8 billion Canadian dollars, equivalent to $2.89 billion.
The deal, unveiled early Sunday, will create the third-largest oil-and-natural-gas producer in Canada and the second-largest Canadian refiner. Husky shareholders will receive a roughly 21% premium to their shares, the companies said. The companies valued the deal at $18 billion, including debt from both companies. The value to Husky shareholders, including their borrowings, would total roughly $7.77 billion, the companies said.
The transaction marks the latest in a global wave of energy transactions, as companies merge in the wake of a drop in energy prices this year. This deal follows others by ConocoPhillips, which agreed to buy Concho Resources, Pioneer Natural Resources, which agreed to acquire Parsley Energy, and Devon Energy’s agreement to merge with WPX Energy Inc.
The Cenovus and Husky transaction is expected to close in the first quarter of 2021 and will leave Cenvous shareholders with 61% of the combined business. Husky Shareholders, including Mr. Li’s Hutchison Whampoa conglomerate, will own the remainder.
“We will be a leaner, stronger and more integrated company, exceptionally well suited to weather the current environment and be a strong Canadian energy leader in the years ahead,” said Alex Pourbaix, Cenovus’s CEO, who will remain in that role after the merger.
‘We will be a leaner, stronger and more integrated company,’ said Cenovus CEO Alex Pourbaix.
Photo: todd korol/Reuters
Write to Vipal Monga at [email protected]
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