Cenovus Energy Inc., a major player in the oilsands industry, has successfully finalized its acquisition of MEG Energy Corp. The deal involves properties located near each other in the oilsands region at Christina Lake, situated south of Fort McMurray, Alberta. Through this transaction, Cenovus gains an additional 110,000 barrels per day of production from MEG’s primary operation.
In a press release on Thursday, Cenovus CEO Jon McKenzie expressed optimism about the acquisition, stating that the integration of MEG’s assets and workforce will immediately benefit Cenovus. The strategic alignment of the two companies is deemed exceptional, with high-quality assets and identified synergies expected to generate substantial value in both the short and long term.
Valued at over $8.6 billion, the acquisition was a combination of cash, shares, and assuming MEG’s debt. Following the completion of the deal, MEG shares are set to be removed from the Toronto Stock Exchange on Friday.
This acquisition concludes a contentious period that saw Cenovus engage in a competitive bidding process against Strathcona Resources Ltd., which eventually backed Cenovus after an improved offer. CK Hutchison Holdings Ltd., Cenovus’ largest shareholder, expressed satisfaction with the acquisition, highlighting the potential for synergies between the adjacent assets of Cenovus and MEG at Christina Lake. The Hong Kong-based conglomerate, known for its long-standing investments in the oilsands sector, emphasized the strategic benefits of the proximity of the two companies’ operations.
