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Husky shareholders back friendly takeover

Cenovus deal worth $3.8 billion in shares

December 15, 2020   by Canadian Press, Calgary

Husky Energy Inc. shareholders have approved a $3.8-billion all-share takeover bid by rival Cenovus Energy Inc., hours before Cenovus shareholders are widely expected to do the same.

The endorsement by Husky investors was resounding, with more than 95 per cent of votes cast in favour of the acquisition.

“We are looking to the future with some renewed optimism,” Frank Sixt, a director of Husky Energy, told a special shareholder meeting following the vote on Tuesday.

“As we look at the combination of Cenovus and Huskey, we are confident that this new company will be more competitive, efficient, profitable and sustainable than either company could have achieved on its own,” he said.

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Comes at a pivotal time

The acquisition comes at a pivotal time in Canada’s energy sector as the collapse in oil prices and global pandemic puts pressure on the oil and gas industry.

The combined company would create the third-largest Canadian oil and natural gas producer by total production, one that Cenovus CEO Alex Pourbaix said will better weather energy market volatility while generating more cash flow, reducing debt and cutting overall costs.

The transaction announced in October has been approved by both boards and is expected to close in the first quarter of 2021, pending both shareholder and regulatory approvals.

More than 2,000 workers

A Cenovus spokesman has said the company plans to trim between 20 and 25 per cent of the 8,600 employees and contractors currently working at the two companies – potentially more than 2,000 workers.

The all-stock deal was cast as a $23.6-billion deal by the Calgary-based companies by including the value of Cenovus and net debt, reported at the end of the second quarter as $8.2 billion for Cenovus and $5.1 billion for Husky.