⁍ Cenovus Energy Inc has agreed to buy rival Husky Energy Inc.TO in an all-stock deal valued at C$3.8 billion ($2.9 billion)
The deal, announced on Sunday, follows recent big deals in the United States.

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⁍ Canadian companies have been under stress for six years, dating back to the last downturn.

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– Cenovus Energy is buying Husky Energy in an all-stock deal valued at $2.8 billion that will create Canada’s No. 3 oil and gas producer, the AP reports. The deal, announced Sunday, follows recent big deals in the US. Concho Resources Inc. agreed this month to being taken over by ConocoPhillips for $9.7 billion. That followed Chevron Corp.’s $4.2 billion purchase of Noble Energy. Canadian companies have been under stress for six years, dating back to the last downturn, due to congested pipelines and the flight by foreign oil companies and investors due to Canada’s high production costs and emissions. Consolidation makes the Canadian industry leaner and lowers costs, said Jackie Forrest, executive director at the ARC Energy Research Institute, adding that deal-making is likely just getting started. The deal makes Cenovus an integrated producer with refineries in Canada and the US, adding to their existing half-ownerships in two US refineries. Refineries have suffered during the pandemic as travel restrictions hammered demand for jet fuel and gasoline, but in more normal times they can provide a hedge for oil producers when crude prices are low. “The diverse portfolio will enable us to deliver stable cash flow through price cycles,” said Cenovus President and CEO Alex Pourbaix. After the deal closes, Cenovus shareholders would own 61% of the combined entity, with Husky shareholders controlling the rest. Hong Kong tycoon Li Ka-shing-controlled Hutchison Whampoa would hold a 15.7% stake in the new company.