Cenovus Energy And Husky Energy Reach Merger Deal

Photo credit: Husky Energy

Cenovus Energy, a publicly-traded Canadian natural gas giant, has announced that it's reached an agreement to merge with Husky Energy, another publicly-traded Canadian energy company, in a deal that adds up to $23.6 billion. Both companies are merging in an all-stock deal that's expected to be completed in the first quarter of next year.

Under the terms of the merger, existing Husky shareholders will receive 0.7845 of a Cenovus share plus 0.0651 of a Cenovus share purchase warrant in exchange for each Husky common share. Upon completion of the merger, the combined company will operate under the Cenovus name and remain headquartered in the Canadian city of Calgary.

Cenovus says it expects its merger with Husky to reap annual run rate synergies of $1.2 billion that'll be largely achieved within the first year following its merger. The merger is expected to produce a company that'll be "stronger, more competitive, efficient and profitable than either company on its own" according to a press statement from Cenovus.

The merging price for Husky represents a 21% premium to its average price per share as at the 23rd of October 2020. Overall, the deal represents one of the biggest seen in Canada this year and in the global scene at large.