06:33 AM EDT, 08/22/2025 (MT Newswires) -- Cenovus Energy ( CVE ) said Friday that it will acquire MEG Energy in a cash-and-stock deal worth 7.9 billion Canadian dollars ($5.68 billion), including assumed debt.

Under the agreement, the company said MEG Energy's shareholders will receive CA$27.25 per share, with 75% paid in cash and 25% in Cenovus shares, subject to certain limits.

Cenovus said it expects the merger to achieve CA$150 million in synergies in 2026, growing to over CA$400 million per year in 2028 and beyond.

The deal, expected to close in Q4, is accretive to adjusted funds flow per share and free funds flow per share.

Cenovus said it has obtained financing through a CA$2.7 billion term loan and a CA$2.5 billion bridge loan to fund the cash component of the transaction, and it plans to maintain strong liquidity and credit ratings.

Post-closing, net debt will be around CA$10.8 billion, it added.

The company said it also plans to adjust its shareholder returns strategy, targeting a return of about 50% of excess free funds flow.