August 25, 2025 [Oil Price]- Cenovus Energy on Friday announced it has entered into a definitive arrangement agreement to acquire MEG Energy Corp in a cash and stock deal valued at US$5.7 billion (C$7.9 billion), including assumed debt.

The agreement between Cenovus and MEG marks the end of a months-long saga in which suitors have sought to buy MEG Energy.

Earlier this year, Strathcona Resources made an unsolicited offer to acquire MEG Energy, but MEG’s board rejected the offer and advised shareholders to reject it too and not tender their shares.

MEG’s board said in June that the share consideration in Strathcona’s offer exposes shareholders to a company with inferior assets, and that “MEG is a uniquely attractive investment opportunity that warrants a premium valuation.”

At the time, MEG initiated a strategic review of alternatives with the potential to surface an offer superior to its standalone plan.

Reports emerged earlier this month that Cenovus Energy was in talks with a coalition of Canadian Indigenous groups to jointly acquire oil sands rival MEG Energy.

Ultimately, Cenovus has apparently decided to go alone and agree a deal with MEG.

The acquisition of MEG will boost Cenovus’s position as a leading oil sands producer, with over 720,000 barrels per day (bpd) of output of the combined company. Many of the assets are complementary and the deal will consolidate adjacent, fully contiguous, and highly complementary assets at Christina Lake. The acquisition is set to enable integrated development of the region and unlock significantly accelerated access to previously stranded resources, Cenovus said.

The transaction has been unanimously approved by the boards of both companies. Cenovus expects the acquisition to close in the fourth quarter of 2025, subject to regulatory approvals and approval of the transaction by MEG shareholders.

MEG’s board recommends MEG Shareholders vote FOR the transaction at a special meeting expected to be held in early October 2025.

“After considering the Strathcona unsolicited offer, engaging with multiple parties on proposals, and assessing them against MEG’s standalone plan, the Special Committee and the MEG Board unanimously concluded that the proposed transaction with Cenovus represents the best strategic alternative, with short- and long-term value creation potential through a premium purchase price, an amalgamation of adjacent top tier oil sands assets, and participation in significant associated synergies,” said James McFarland, chairman of MEG’s board of directors.