Chinese state-owned oil and gas giant CNOOC Ltd will buy Canadian oil company Nexen for $15.1 billion, the two companies announced Monday.
They said in a statement that CNOOC, which is China's biggest offshore oil and gas producer, will acquire all of the outstanding common shares in Nexen for $27.50 per share in cash.
The deal is expected to close in the fourth quarter of this year.
"The acquisition reflects our strong belief in Nexen's rich and diverse portfolio of assets and world-class management and employees," CNOOC chairman Wang Yilin said in a statement."This is an exciting opportunity for us to build on our existing joint venture relationship with Nexen in Canada, and to acquire a leading international platform in the process," he added."We strongly believe that this acquisition will create long-term value for CNOOC Ltd's shareholders."
Nexen chairman Barry Jackson said he believed the transaction would deliver "significant and immediate" value to the company's shareholders. The offer price represents a 61 percent premium over Nexen's closing price on Friday.
"The Nexen board is unanimous in its view that the transaction is in the best interest of Nexen and recommends shareholders vote in favor of the transaction," he said.
Nexen currently has debt of about $4.3 billion.
CNOOC has 2.8 billion Canadian dollars invested in Canada, including stakes in MEG Energy Inc and OPTI Canada Inc.
CNOOC acquired OPTI, an oil sands producer, last year and is a joint venture partner with ConocoPhilips, the third largest integrated energy company in the United States.Industry officials said Nexen will help CNOOC extend its presence in many of the world's most significant oil and gas producing regions -- including western Canada, the North Sea, the Gulf of Mexico and offshore Nigeria.
"The acquisition of Nexen expands CNOOC Ltd's overseas businesses and resource base in order to deliver long-term, sustainable growth," CNOOC said on its website.Under the agreement, Nexen's assets in Britain, the United States and other countries will continue to be managed from its regional offices, and CNOOC will retain the current management and employees in those operations as well as continue to work with local suppliers.
CNOOC will fund the proposed acquisition through "existing cash resources and external financing", the company said in a filing to the Hong Kong Stock Exchange.