CALGARY — Cenovus Energy Inc. has signed a cash-and-stock deal to buy MEG Energy Corp. that values the company at $7.9 billion, including debt.
The deal comes after Strathcona Resources Ltd. made an unsolicited offer for MEG in May that the company urged shareholders to reject.
MEG chairman James McFarland said the company's special committee conducted a comprehensive review of all available alternatives to maximize value.
"After considering the Strathcona unsolicited offer, engaging with multiple parties on proposals, and assessing them against MEG's standalone plan, the special committee and the MEG Board unanimously concluded that the proposed transaction with Cenovus represents the best strategic alternative," McFarland said in a statement.
Cenovus chief executive Jon McKenzie said the deal represents a unique opportunity to acquire about 110,000 barrels per day of production which sits adjacent to its core Christina Lake operations.
"The magnitude of synergies that we have identified makes this a compelling value creation opportunity for Cenovus shareholders," McKenzie said.
"The team at MEG has done a fantastic job developing these assets, and we look forward to leveraging our combined expertise and scale to drive additional value for many years to come.”
Under the agreement, MEG shareholders can receive $27.25 in cash or 1.325 Cenovus common shares for each MEG share, subject to a limits of $5.2 billion in cash and 84.3 million Cenovus shares available.
On a fully pro-rated basis, the offer per MEG share represents $20.44 in cash and 0.33125 of a Cenovus share.
MEG shares closed at $27.56 on the Toronto Stock Exchange on Thursday, while Cenovus shares closed at $21.17.
The deal must be approved by a two-thirds majority vote by MEG shareholders expected to be held in October.
Strathcona's offer, which is open until Sept. 15, includes a combination of 0.62 of a Strathcona share and $4.10 in cash per MEG share. Based on Strathcona's closing share price of $38.83 on Thursday, its bid is worth $28.17 per MEG share.
This report by The Canadian Press was first published Aug. 22, 2025.
Companies in this story: (TSX:CVE, TSX:MEG)
The Canadian Press
