Chinese state-owned oil and gas giant CNOOC Ltd (中國海洋石油) will buy Canadian oil company Nexen for US$15.1 billion, the two companies announced yesterday.
They said in a statement that CNOOC, which is China’s biggest offshore oil and gas producer, will acquire all of the common shares of Nexen for US$27.50 per share in cash.
The deal is expected to close in the fourth quarter of this year.
“The acquisition reflects our strong belief in Nexen’s rich and diverse portfolio of assets, and world-class management and employees,” CNOOC chairman Wang Yilin (王宜林) said in a statement.
“This is an exciting opportunity for us to build on our existing joint venture relationship with Nexen in Canada, and to acquire a leading international platform in the process,” he added.
Nexen chairman Barry Jackson said he believed the transaction would deliver “significant and immediate” value to the company’s shareholders and the Nexen board would recommend shareholders vote in favor of the transaction.
The offer price represents a 61 percent premium over Nexen’s closing price on Friday. The company currently has debt of about US$4.3 billion.
CNOOC has C$2.8 billion (US$2.76 billion) invested in Canada, including stakes in MEG Energy Inc and OPTI Canada Inc.
Under the agreement, Nexen’s assets in Britain, the US and other countries will continue to be managed from its regional offices, and CNOOC will retain the current management and employees in those operations, as well as continue to work with local suppliers.