Cenovus Energy (CVE) has agreed to acquire fellow Canadian energy company Athabasca Oil in a cash-and-stock deal with an implied enterprise value of roughly $5.7 billion Canadian dollars ($4 billion), as it aims to expand its core oil sands business.
Shareholders of Athabasca will have the option to receive CA$12 per share in cash or 0.264 Cenovus shares, with the aggregate consideration comprising between 65% and 75% cash and between 25% and 35% Cenovus shares, the companies said in separate statements Monday. The consideration is capped at CA$4.3 billion in cash and 44.4 million Cenovus shares.
Cenovus’ New York stock exchange-listed shares fell 2% in the most recent premarket activity.
“This transaction strengthens our position in one of the world’s premier oil-producing regions and is a natural extension of our oil sands strategy,” Cenovus Chief Executive Jon McKenzie said in a statement. “Athabasca’s high-quality, long-life assets fit well with our portfolio and provide a clear opportunity to apply our scale and operating expertise to improve performance, grow production and create long-term shareholder value.”
Cenovus expects the acquisition to add about 45,000 barrels of oil equivalent per day, including thermal production near its Christina Lake, May River and Thornbury assets. It sees a pathway to accelerate thermal production to 115,000 barrels per day by 2032.
The transaction will also consolidate Cenovus’s ownership of Duvernay Energy Corporation, where Cenovus and Athabasca are currently equity partners. Cenovus sees an option to accelerate development and grow Duvernay production to a sustainable 20,000 barrels of oil equivalent per day.
“Cenovus is the right long-term operator for these assets, with the scale, financial capacity, technical expertise and proven execution record to accelerate their development and realize their long-term potential,” according to Athabasca CEO Rob Broen.
Cenovus estimates the deal to generate roughly CA$85 million in annual corporate and commercial synergies, with the majority expected to be realized in the first full year after closing. The oil sands producer intends to finance the acquisition with cash on hand and certain short-term borrowings.
The deal, which requires approval from regulators and clearance from Athabasca’s shareholders, is expected to complete in December.
In November 2025, Cenovus completed the acquisition of MEG Energy in a cash-and-stock deal worth around CA$7.9 billion. Two months earlier, the company agreed to sell its 50% stake in WRB Refining to its joint venture partner Phillips 66 (PSX) for $1.4 billion.
In the broader industry, Shell (SHEL) completed its purchase of ARC Resources last month. The transaction had an equity value of about $13.6 billion.
Source: finance.yahoo.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.
