Cenovus Energy has entered into a definitive agreement to acquire MEG Energy in a cash and stock transaction valued at $7.9 billion CAD ($5.7 billion USD), inclusive of assumed debt. 

The deal follows MEG's recent rejection of a lesser takeover bid from Strathcona Resources.

The acquisition brings together two leading SAGD oil sands producers with combined oil sands production of over 720,000 bpd, the lowest steam-to-oil ratio and the largest land base in the best quality resource area in the basin.

Cenovus also stated the deal consolidates adjacent, fully contiguous and highly complementary assets at Christina Lake, enabling integrated development of the region and unlocking significantly accelerated access to previously stranded resource.

“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,” said Jon McKenzie, Cenovus President & Chief Executive Officer. “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.”