By Adriano Marchese
Cenovus Energy struck a 7.9 billion Canadian dollar ($5.68 billion) deal to buy MEG Energy in a blockbuster move that's set to create a more dominant pure-play producer focused on the Canadian oil-sands region.
Cenovus said Friday that it has entered into a definitive arrangement agreement to acquire MEG Energy in a cash-and-stock deal that includes taking on all assumed debt, bringing together two steam-assisted gravity drainage oil-sands producers with combined production of 720,000 barrels a day.
Cenovus agreed to pay C$27.25 a share, made up of 75% cash and the remaining 25% in Cenovus shares.
The acquisition is expected to be immediately accretive to adjusted funds flow and free funds flow per share, and the combined company is expected deliver synergies starting with an initial annual C$150 million in the near term, and growing to C$400 million a year by 2028.
To fund the acquisition, Cenovus has obtained financing commitments made up of a C$2.7 billion term loan facility and a C$2.5 billion bridge facility, and the Calgary, Alberta, company said it has plans to begin a senior debt offering to replace the bridge facility.
The deal follows MEG Energy's strategic review of alternatives that began in mid-June as the company sought to surface an offer superior to its standalone plan.
Write to Adriano Marchese at adriano.marchese@wsj.com
(END) Dow Jones Newswires
August 22, 2025 06:38 ET (10:38 GMT)
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