Canada’s Cenovus Energy to buy Husky Energy for $18 billion

In this news, we discuss the Canada’s Cenovus Energy to buy Husky Energy for $18 billion.

(Reuters) – Canadian oil and gas producer Cenovus Energy Inc to buy counterpart Husky Energy Inc in all-equity deal valued at C $ 23.6 billion ($ 17.97 billion), debt included, the companies said in a joint statement on Sunday.

The deal is the latest sign of consolidation in the energy sector following the collapse in oil prices.

Earlier this month, Concho Resources Inc agreed to be acquired by ConocoPhillips for $ 9.7 billion. This follows Chevron Corp’s $ 4.2 billion purchase of Noble Energy.

Cenovus’ deal for Husky involves a transaction value for Husky of approximately C $ 3.8 billion and an enterprise transaction value of approximately C $ 10.2 billion, the statement said.

Husky shareholders will receive 0.7845 of a Cenovus share and 0.0651 of a Cenovus share purchase warrant in exchange for each Husky common share, the statement said.

The combined company is expected to generate annual synergies of C $ 1.2 billion and will operate as Cenovus Energy Inc with its headquarters in Alberta, Canada, the release said.

Alex Pourbaix, CEO of Cenovus, will serve as CEO of the merged company with Jeff Hart, currently CFO of Husky, becoming CFO.

Cenovus said the merged company would be Canada’s third-largest producer of oil and natural gas with production of 750,000 barrels of oil equivalent per day of low-cost oil and natural gas.

The transaction was unanimously approved by the boards of directors of Cenovus and Husky and is expected to close in the first quarter of 2021, the companies said.

Report by Ann Maria Shibu in Bengaluru; Edited by Susan Fenton

Original © Thomson Reuters

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