(EnergyAsia, July 24 2012, Tuesday) — China’s largest offshore oil company has agreed to purchase Canada’s Nexen Inc for US$15.1-billion in the biggest takeover of a Canadian firm by an Asian company. (US$1=C$1.02).
In an all-cash deal, CNOOC Ltd will pay US$27.50 per share for a 66% premium to Nexen’s 20-day volume-weighted average on the NYSE. The share price of Canada’s 12th largest oil and gas company, which has struggled to grow its recent 213,000 b/d production, closed at US$17.06 last Friday.
The cash pay-out will cover Nexen’s common and preferred shares, as well as its current debt of approximately US$4.3 billion.
Having secured the unanimous approval of the Nexen and CNOOC Limited boards, the proposed deal must clear the approval of regulators and shareholders of both companies if it is achieve completion in the fourth quarter.
CNOOC Ltd said the addition of Nexen will enhances its presence in Canada, Nigeria and the Gulf of Mexico, in particular the UK North Sea where the Canadian firm has built up a significant upstream presence which now faces rising cost as a result of a new tax scheme.
“The acquisition of Nexen expands CNOOC Limited’s overseas businesses and resource base in order to deliver long-term, sustainable growth,” said CNOOC Ltd.
“Nexen will complement CNOOC Limited’s large offshore production footprint in China and extends CNOOC Limited’s global presence with a high-quality asset base in many of the world’s most significant producing regions – including Western Canada, the UK North Sea, the Gulf of Mexico and offshore Nigeria – focused on conventional oil and gas, oil sands and shale gas.
“In addition, Nexen management’s current mandate will be expanded to include all of CNOOC Limited’s North American and Caribbean assets.”
The Chinese firm said it plans to establish Calgary as its North and Central American headquarters to oversee its existing operations in the region including US$8 billion worth of assets. The Calgary office will also retain Nexen’s existing management team and employees.
This will be CNOOC Ltd’s third acquisition in Canada after last November’s C$2.1 billion takeover of OPTI Canada Inc, and an earlier stake in MEG Energy.