06:44 AM EDT, 08/22/2025 (MT Newswires) -- Cenovus Energy ( CVE ) on Friday said it has agreed to acquire MEG Energy ( MEGEF ) in a cash and stock deal valued at $7.9 billion, inclusive of assumed debt.

Cenovus will acquire all of MEG's issued and outstanding common shares for $27.25 per share, to be paid 75% in cash and 25% in Cenovus common shares.

MEG shareholders may choose to receive $27.25 in cash or 1.325 Cenovus common shares, subject to proration based on a maximum amount of $5.2 billion in cash and a maximum of 84.3 million Cenovus common shares.

On a fully prorated basis, the consideration per MEG common share represents about $20.44 in cash and 0.33125 of a Cenovus common share.

The transaction will combine two oil sands producers with combined output of over 720,000 barrels per day and consolidate assets at Christina Lake.

Cenovus expects to realize about $150 million of near-term annual synergies, growing to over $400 million per year in 2028 and beyond.

"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 Cenovus President and CEO Jon McKenzie.

To fund the cash portion of the deal, Cenovus has obtained financing composed of a $2.7 billion term loan facility and a $2.5 billion bridge facility. The company expects to commence a senior debt offering to replace the bridge facility.

The fully committed term loan and bridge facilities have been provided by Canadian Imperial Bank of Commerce and JP Morgan Chase Bank as co-underwriters and joint bookrunners.

The deal has been unanimously approved by the boards of both companies and is expected to close in the fourth quarter, subject to customary closing conditions and MEG shareholder approval.

Strathcona Resources ( STHRF ) in late May had offered to acquire all of MEG Energy's ( MEGEF ) common shares it does not already own for 0.62 of a Strathcona common share and $4.10 in cash per MEG common share.