Suncor makes bid to take over Petro-Canada

From Wikinews, the free news source you can write!
Jump to: navigation, search

Monday, March 23, 2009

A Sunoco station in Toronto, Ontario.

Two of Canada's largest energy companies are merging, with Suncor Energy making a CA$19.2-billion bid to take over Petro-Canada.

Suncor shareholders purchased $19.2 billion in stock and now own about 60% of Petro-Canada. Petro-Canada shareholders own the remaining 40%.

Petro-Canada gas pump
Image: Edison.

Suncor is reported to be the third largest Canadian energy producer, and Petro-Canada is Canada's sixth largest. The current market value of Petro-Canada is $14.4 billion.

"This is a made-in-Canada response to the challenges presented by global market uncertainty. More importantly, it's a made-in-Canada strategy to unleash the potential of these two companies and their people in the future," said Ron Brenneman, chief executive officer of Petro-Canada.

"We need to face head-on the issue of global competition in a time of economic uncertainty. In these difficult times, we believe that joining forces provides the strength we need to be a leader in value creation in an extremely competitive industry, added Brenneman."

Petro-Canada shares on the Toronto Stock Exchange (TSE) rose from $29.65 to $36.77, a 24% rise, while Suncor shares rose from $30.90 to $32.12, up 5%, at mid-morning.

"The merger will be good for shareholders of both companies with reduced capital requirements, operating efficiencies and complementary integration opportunities between upstream and downstream assets. The increased scale provides more stability in volatile markets, plus the financial and organizational capability to successfully take on large-scale projects in the future," said Mr. Rick George, current Suncor chief executive and the next CEO for the merged companies.


Sources

Bookmark-new.svg