Cenovus Energy Inc. and Husky Energy Inc. have announced a transaction to create a new integrated Canadian oil and natural gas company with an upstream and downstream portfolio that is expected to provide enhanced free funds flow generation and improved return opportunities for investors.
The combination of the two businesses will result in CA$1.2 billion in cost and capital synergies, enhance free funds flow generation and support investment grade credit profile.
The companies have entered into a definitive arrangement agreement under which Cenovus and Husky will combine in an all-stock transaction valued at CA$23.6 billion, inclusive of debt. The combined company will operate as Cenovus Energy Inc. and will remain headquartered in Calgary, Alberta. The transaction has been unanimously approved by the Boards of Directors of Cenovus and Husky and is expected to close in 1Q21.
Alex Pourbaix, Cenovus President and Chief Executive Officer, said: “The diverse portfolio will enable us to deliver stable cash flow through price cycles, while focusing capital on the highest-return assets and opportunities. The combined company will also have an efficient cost structure and ample liquidity. All of this supports strong credit metrics, accelerated deleveraging and an enhanced ability for return of capital to shareholders.”
Rob Peabody, Husky President and Chief Executive Officer, said: “Bringing our talented people and complementary assets together will enable us to deliver the full potential of this resilient new company. The integration of Cenovus’s best-in-class in situ oil sands assets with Husky’s extensive North American upgrading, refining and transportation network and high netback offshore natural gas production, will create a low-cost competitor and support long-term value creation.”
Read the article online at: https://www.tanksterminals.com/special-reports/26102020/cenovus-and-husky-team-up-to-create-a-new-combined-company/
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