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Bloomberg
Cenovus Energy Inc agreed to buy Husky Energy Inc in an all-stock deal valuing Husky at about C$3.8 billion ($2.9 billion), creating Canada’s third-largest oil and natural gas producer.
The deal promises to combine two of the largest players in Canada’s oil sands at a time that valuations have crumbled in the sector. Even before this year’s oil-price slump, Alberta was grappling with severe pipeline bottlenecks that limited exports. Husky’s shares are down about 84% over the past five years, while Cenovus has dropped 74%.
Cenovus will own 61% of the new company, while Husky will hold a 39% stake. Hong Kong billionaire Li Ka-shing’s CK Hutchison Holdings, the main shareholder in Husky, will own about 27%, according to a company presentation.
The new company is expecting C$1.2 billion in cost and capital synergies, 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, representing a 21% premium excluding warrants, it said.