Suncor reaches $4.2-billion deal with Canadian Oil Sands – by Jeff Lewis (Globe and Mail – January 19, 2016)

http://www.theglobeandmail.com/

CALGARY — Suncor Energy Inc. reached a deal to acquire rival Canadian Oil Sands Ltd. with a richer offer, putting it on track to hold the largest stake in one of the industry’s most troubled operations.

Suncor on Monday said the two companies agreed to a revised $4.2-billion deal equivalent to 0.28 of one of its shares for each Canadian Oil Sands share, ending a public feud between the partners in the Syncrude Canada Ltd. mining and upgrading project. Suncor also lowered the threshold of support needed for the deal to go through to 51 per cent from 66.7 per cent previously.

The détente inches Suncor closer to securing an additional 37-per-cent interest in Syncrude, a project with a history of mechanical breakdowns and missed production targets that ranks as one of the sector’s most expensive to operate. Suncor currently owns 12 per cent of the venture.

For months, chief executive officer Steve Williams has insisted the company can leverage its financial heft and deep experience running complex mining projects to boost reliability and wring cost savings from the aging Syncrude plant.

But those efforts now face headwinds from crude prices that have slumped to below $30 (U.S.) a barrel, as well as a management structure led by Imperial Oil Ltd. that analysts say has hampered attempts to improve the asset’s performance to date.

For the rest of this article, click here: http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/suncor-hikes-bid-for-canadian-oil-sands/article28236158/

Comments are closed.