(Reuters) – Canadian oil and gas producer Cenovus Energy (NYSE:) Inc will buy peer Husky Energy (OTC:) Inc in an all-stock transaction valued at $23.6 billion, inclusive of debt, the companies said in a joint statement on Sunday.
Husky shareholders will receive 0.7845 of a Cenovus share plus 0.0651 of a Cenovus share purchase warrant in exchange for each Husky common share, according to the statement.
The combined company is expected to generate annual synergies of $1.2 billion and will operate as Cenovus Energy Inc with headquarters in Alberta, Canada, the statement said.
Cenovus CEO Alex Pourbaix will serve as chief executive of the merged company with Jeff Hart, currently Husky’s finance chief, becoming chief financial officer.
Cenovus said the combined company will be the third largest Canadian oil and producer with production of 750,000 barrels of oil equivalent per day of low-cost oil and natural gas.
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