Cenovus Energy Inc. is acquiring Husky Energy Inc., creating Canada’s fourth-largest energy company as it copes with chronically low crude prices and investor pessimism about the industry’s fortunes.
Cenovus, known for its Alberta oil sands operations, said on Sunday it will issue shares and stock-purchase warrants to acquire Husky, adding sizable oil-refining capacity in Canada and the United States to reduce its exposure to volatile Canadian oil markets.
The $3.8-billion deal offers a 21-per-cent premium to Husky’s recent share prices, and Cenovus will also take on more than $6-billion in Husky debt.
It is the latest in a spate of North American energy transactions following the drop in oil prices that accompanied the COVID-19 pandemic. Last week, ConocoPhillips announced a US$9.7-billion offer for Texas-based shale-oil producer Concho Resources.
Alex Pourbaix, Cenovus’s chief executive officer, said he and his counterpart at Husky, Rob Peabody, had discussed combining the companies at various times in recent years.
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