23 March 2009 13:51 [Source: ICIS news]
LONDON (ICIS news)--Suncor Energy has agreed to buy rival Canadian energy company Petro-Canada to create ?xml:namespace>
Suncor will pay about $15bn (€11bn) worth of stock for Petro-Canada in an all-share deal, saying the increased scale of the merged companies would provide it with more stability in Canada's volatile oil sands industry.
The companies said they expect to achieve operating expenditure reductions of around $300m per year following the merger, generated through efficiencies in overlapping operations, streamlining business practices and improved logistics.
The combined group was also expected to achieve annual capital efficiencies of approximately $1bn through the elimination of redundant spending and targeting capital budgets to high-return, near-term projects.
“The combined portfolio boasts the largest oil sands resource position, a strong Canadian downstream brand, solid conventional exploration and production assets, and low-cost production from Canada's east coast and internationally,” said Suncor CEO Rick George, who would also take control of the combined company.
Petro-Canada shareholders would receive 1.28 common shares of the merged company for every share held, while Suncor shareholders would get one common share of the merged company for each Suncor share.
After the deal, current Suncor shareholders would own about 60% of the new company.
($1 = €0.74)
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