Total to acquire Canada’s UTS Energy for C$1.5 billion
08 Jul 2010
French oil giant Total SA yesterday said that it will acquire Canadian oil sands developer UTS Energy Corporation along with its 20-per cent interest in the Fort Hills oil sands project in Alberta, for C$1.5 billion ($1.4 billion).
Under the deal, UTS will transfer its assets, other than its interest in Fort Hills, to a newly formed company and Total's Canadian subsidiary Total E&P Canada will acquire the company for C$3.08 per share.
Taking into account the C$355 million cash held by UTS, which would be acquired by Total, the cost of acquisition will be about C$1.5 billion.
This is the second time that the France-based Total has made its move to acquire UTS. In early 2009, Total made a hostile bid for the Canadian oil sands developer, but was unanimously rejected by the board and shareholders of UTS citing the bid as too low.
The Fort Hills project is operated by the Canadian company Suncor Energy, which holds a 60-per cent interest stake in it, while Teck Resources Ltd holds the remaining 20 per cent.
According to recent estimates, the resources at Fort Hills are approximately 3.4 billion barrels of bitumen, which will be exploited through open pit mining.
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