China's CNOOC set to buy Canadian energy giant Nexen for $15.1 billion
Alberta-based energy giant Nexen Inc. has agreed to a $15.1-billion (U.S.) takeover by Chinese oil producer CNOOC (Chinese National Offshore Oil Cooperation CNOOC) Ltd. The all-cash deal, if successful, would be China’s biggest overseas energy acquisition to date.
CNOOC's deal is worth $27.50 per Nexen share, a 66-per-cent premium to the 20-day volume-weighted average for the company.
In its press release, the Chinese oil company said that "unless otherwise agreed in writing between the parties," Nexen employees will be "provided with compensation not less than, and benefits that are, in the aggregate, no less favorable than, those provided" by the company before the takeover.
Buying Canadian energy firms
Chinese companies have spent $23 billion since 2005 acquiring Canadian energy firms. CNOOC's last major deal in Canada was a $2.1 billion acquisition of oil-sands developer OPTI Canada.
The Nexen takeover will represent a challenge for Prime Minister Stephen Harper as to how foreign ownership of Canadian energy companies can benefit Canada. Last year, the Harper government had to kill off a hostile takeover of Saskatchewan-based Potash Corp. by Australia's BHP Billiton Ltd. due to strong pressure from Potash and Saskatchewan Premier Brad Wall.