Canada’s Husky Energy offers $5 billion deal to buy MEG Energy

By , in Technologies on .

According to recent reports, on Sunday, the Canadian oil and gas producer Husky Energy Inc (HSE.TO) said that yesterday the company made an unsolicited bid on their rival energy company MEG Energy Corp (MEG.TO) in deal which according to reports worth C$6.4 billion which is equivalent to $5 billion, this value also including the debt which MEG Energy Corp (MEG.TO) has at the moment.

Husky in a statement said that If the deal is approved by the company, then the two companies’ combined would produce a total of more than 410,000 boepd (barrels of oil equivalent per day) and more so combination of the two companies would led to upgrading and refining capacity of up to 400,000 bpd (barrels per day).

In accordance to the selling of the company, this offer came since at the moment many Canadian oil producers face transportation bottlenecks, this transpired after oil output surged hence pushing the Canadian heavy crude oil to near the historic discounts to the light crude oil produced by the U.S.

Rob Peabody, Husky Chief Executive yesterday spoke to Reuters reporters and said that the combination of the two companies, MEG’s top-quality assets and Canadian oil and gas producer Husky Energy Inc (HSE.TO) staff together will improve on the production and more so the downstream network thereby allowing MEG circumvent some effects which come from the Canadian crude discount and more so provide the benefits on both sets of shareholders.

According to reports, the Husky offer just come less than two months in the tenure of Derek Evans, a veteran industry executive who took over as the chief executive of the MEG company in August. MEG Energy’s board on the other hand in a statement said that it will evaluate and consider Husky’s unsolicited offer and more so related takeover on the circular bid.

MEG said this will only be possible if the company receives the circular bid. According to MEG reports, the company said that up to now the company has formed a special committee with independent directors but it has retained their legal and financial advisers.