Canadian oil-sands firm Suncor to acquire Petro-Canada for $13.7 billion

23 March 2009

In the second-biggest oil and gas industry marger deal since January 2007, the world's second-largest oil-sands producer and Canada's sixth ranked energy company, Suncor Energy is acquiring its larger rival Petro-Canada in a negotiated deal for $13.7 billion in an all-share transaction to emerge  as Canada's biggest energy company with a combined market value of $35 billion.

Petro-Canada is the country's second-biggest refiner and the merger enbles Suncor to diversify and gain Petro-Canada global assets in the North Sea, Libya, Syria and offshore Trinidad and Tobago, with a combined  resource base of about 7.5 billion barrels of oil equivalent of proven and probable reserves, in addition to an estimated contingent resource base of approximately 19 billion barrels of oil equivalent. 

It will also gain a refining capacity of 433,000 barrels per day and a strong Canadian network of retail pumps and a platform for development of renewable energy projects.

Suncor's oil sands operations, loacted in northern Alberta, upgradation to refinery-ready feedstock and diesel fuel from recovery of bitumen. It is also a natural gas explorere in western Alberta and northeastern British Columbia and also operates an 85,000 barrel-a-day efinery in Ontario that produces petrol , kerosene, jet and diesel fuels and a 93,000 barrel-a- day refinery near that also produces petrol and diesel fuel apart from paving-grade asphalt.
The deal is expected to close in the third quarter.

Petro-Canada common shareholders will receive 1.28 common shares of the merged company for each common share of Petro-Canada they own and each Suncor common shareholder will receive one common share of the merged company for each common share of Suncor, the two companies said in a joint statement.

The exchange ratio represents an approximately 25 per cent premium for the Petro-Canada shares to the 30-day weighted-average trading price of such shares.