Husky Energy Inc. said it has made an unsolicited bid to acquire oil sands oil producer MEG Energy Corp. in what would be a combination of Canadian petroleum companies.
Calgary-based Husky HSE, +1.02% said it was proposing to purchase MEG MEG, +5.80% for $3.3 billion Canadian dollars ($2.6 billion U.S. dollars) in a cash-and-stock deal. Husky will also assumed MEG’s debt, which is about $3.1 billion Canadian dollars ($2.4 billion U.S.). John Rogers, MEG’s vice president of investor relations, said the management and board of directors was examining the bid “to determine whether it is in the best interest of shareholders.”
If the board and shareholders accept Husky’s bid, the combined companies would have a large set of oil production, pipelines and refineries in western Canada’s oil sands, a region where viscous oil is abundant but expensive to produce. MEG produces about 100,000 barrels a day of oil, mostly from a process of pumping steam into the underground oil formations to heat it and make it more of a liquid.
Husky operates refineries in Canada and the United States, as well as offshore oil exploration and production in China, Indonesia and Canada. Husky produces about 186,000 barrels a day in western Canada and the oil and natural gas equivalent of 322,900 barrels a day globally, according to Husky annual report.
An expanded version of this report appears on WSJ.com.
Also popular on WSJ.com:
Elon Musk to step down as Tesla chairman, remain CEO.
New York towns gearing up to fight IRS ruling on local taxes.
