The Canadian energy group Strathcona Resources has announced its intentions to start a take-over bid for its Canadian rival MEG Energy. Strathcona plans to acquire all of the issued and outstanding common shares of MEG Corp, which according to the closing share price of the Strathcona Shares on the Toronto Stock Exchange as of the 15 May 2025, represents a total consideration of US$23.27 per MEG share (82.4% Strathcona Shares and 17.6% cash).
The combined business is expected to be owned approximately 56.5% by existing Strathcona shareholders, 37.8% by existing holders of MEG Shares and about 5.6% by WEF III (Waterous Energy Fund, the current holder of 79.6% of Strathcona Shares).
The merger of both businesses would represent the creation of Canada’s fifth largest oil producer (+200 kb/d of heavy oil) and fourth largest SAGD producer, with among the largest proved oil reserves in North America.