Suncor confirms US$4.5bn COS deal

Article by Staff Writer

SUNCOR Energy has announced a C$6.6bn (US$4.5bn) takeover agreement for fellow Calgary, Canada company Canadian Oil Sands (COS).

Suncor initially put in a bid worth C$4.3bn in October 2015. COS stockholders rejected that and several more offers in the following months in order to entice Suncor to increase its offer. COS has now accepted a takeover bid of C$4.2bn, which includes a higher percentage of stock value, and Suncor will also assume COS’ debt of C$2.4bn.

Steve Williams, president and CEO of Suncor, said, “We are pleased to have the support of the COS board of directors and shareholders. We believe this transaction delivers excellent value to COS shareholders while maintaining Suncor's commitment to capital discipline, providing both companies' shareholders with near and long-term value.”

Don Lowry, chairman of Canadian Oil Sands, said, “Since Suncor made its initial offer, our board has remained steadfast in our commitment to maximise value for all shareholders. This agreement fulfils that commitment, providing our shareholders with a higher exchange for their shares despite a 37% decline in spot oil prices.”

COS is the largest owner of the synthetic crude (Syncrude) oil sands mining consortium in Alberta state, with Suncor, the next leading stakeholder. Once the takeover is complete, Suncor will become the largest owner of Syncrude oilsands complex, operated by Imperial Oil.

Suncor will need at least 51% of the COS shares from the takeover, in order to become the largest Syncrude owner. COS says the deal will be subject to conditions that Suncor must fulfil before share transfers are finalised.

Article by Staff Writer

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