Wedoany.com Report-Aug. 31, Cenovus Energy, a Canadian oil and gas company, has agreed to acquire MEG Energy, an Alberta-based firm specializing in in situ thermal oil production, for approximately C$7.9 billion ($5.7 billion), including assumed debt. The acquisition, announced recently, aims to strengthen Cenovus’ position as a leading steam-assisted gravity drainage (SAGD) oil sands producer, combining assets to achieve over 720,000 barrels per day of production.

MEG Energy to be acquired by Cenovus Energy.

The deal involves a mix of cash and Cenovus shares, with MEG Energy shareholders offered C$27.25 ($19.7) per share, comprising 75% cash and 25% Cenovus shares. Shareholders can choose between receiving C$27.25 in cash or 1.325 Cenovus shares per MEG Energy share, subject to pro-ration limits. The transaction offers a 33% premium over MEG Energy’s 20-day volume-weighted average share price prior to an earlier public acquisition announcement.

The agreement followed a strategic review by MEG Energy, initiated around mid-June 2025, which evaluated options including a standalone development plan and an unsolicited offer from Strathcona Resources, proposing C$4.1 ($2.97) in cash and 0.62 Strathcona shares per MEG Energy share. The MEG Energy board determined that the Cenovus deal best serves the company and its stakeholders.

MEG Energy President and CEO Darlene Gates stated: “This strategic transaction with Cenovus accelerates and de-risks the value embedded in our compelling standalone plan. I am extremely proud of the MEG team, whose focus and execution around our world-class assets positioned us to deliver this positive outcome for shareholders. Through the process, it became clear that bringing together MEG and Cenovus’ Christina Lake assets is a unique opportunity for synergy realisation that will maximise the value of the resource for the benefit of its stakeholders.”

Cenovus expects to achieve annual synergies exceeding C$400 million ($289 million) by 2028 through operational, commercial, and corporate efficiencies. Cenovus President and CEO Jon McKenzie commented: “This transaction represents a unique opportunity to acquire approximately 110,000 barrels per day of production within some of the highest quality, longest-life oil sands resource in the basin, which sits directly adjacent to our core Christina Lake asset. The magnitude of synergies that we have identified makes this a compelling value creation opportunity for Cenovus shareholders. 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.”

The transaction, unanimously approved by both companies’ boards, is expected to close in the fourth quarter of 2025, pending regulatory approvals, shareholder consent from MEG Energy, and customary closing conditions.