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http://247wallst.com/2009/03/23/oil-sands-universe-just-got-simpler-su-pcz-tot-eny/
Oil Sands Universe Just Got Simpler (SU, PCZ, TOT, ENY)
Posted: March 23, 2009 at 7:33 am
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Two of the largest players in the Canadian oil sands, Suncor Energy Inc. (NYSE: SU) and Petro-Canada (NYSE:PCZ) announced that Suncor will acquire Petro-Canada in a deal valued at $15.5 billion. Shareholders of Petro-Canada will get 1.28 shares of the new company for each share of Petro-Canada they hold, and Suncor shareholders will get one share for each share of Suncor they hold.
According to the joint press release, the deal represents a 25% premium over the 30-day weighted average of Petro-Canada stock. Once the share exchange is completed, Suncor shareholders will hold 60% of the new company and Petro-Canada shareholders will hold the remaining 40%. The new company will retain the Suncor name, as well as the Petro-Canada brand in the refining and marketing end of the business.
Suncor’s president and CEO said, “The combined portfolio boasts the largest oil sands resource position, a strong Canadian downstream brand, solid conventional exploration and production assets, and low-cost production from Canada’s east coast and internationally.” Petro-Canada’s president and CEO, who will become the Executive Vice Chairman of the new company, said, “The merger will be good for shareholders of both companies with reduced capital requirements, operating efficiencies and complementary integration opportunities between upstream and downstream assets. The increased scale provides more stability in volatile markets, plus the financial and organizational capability to successfully take on large-scale projects in the future.”
The merged companies expect to save $300 million a year in operating expenses. Combined production totals 680,000 barrels of oil equivalent annually, and refining capacity totals 433,000 barrels/day. The merged companies wil