Suncor acquires Petro-Canada

Normal 0 false false false EN-US X-NONE X-NONE MicrosoftInternetExplorer4 /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin;} An all-share deal to create CanadaÔÇÖs biggest energy company was announced early today, with Suncor Energy acquiring rival Petro-Canada for around C$17 billion.   Both companies are based in Calgary, and the merger is expected to yield savings in operating costs of over C$300 million year, with annual capital efficiencies of over C$1 billion, according to the companies.   Suncor is the second-biggest producer in the oil sands, and this deal is the largest in the global oil and gas industry since 2006 when Statoil of Norway acquired the oil and gas assets of Norsk Hydro for $29 billion.   Petro-Canada common shareholders will receive 1.28 common shares of the expanded company for each share of Petro-Canada, while Suncor shareholders will receive new shares on a one-for-one basis.   The merged company will operate under the Suncor name, with its former shareholders owning about 60 percent, with the remaining 40 percent owned by former Petro-Canada shareholders.   "This merger creates a made-in-Canada energy leader with the assets, cost structure and financial strength to compete globally," said Rick George, president and chief executive officer of Suncor, who will continue in those roles in the new company.   Petro-CanadaÔÇÖs Ron Brenneman will become executive vice-chairman, and the twelve-strong board will draw eight members from Suncor and four from Petro-Canada.   "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," said Brenneman.   The decline in the price of oil from over $147 a barrel last July to about $53 today has put all oil companies under pressure, particularly those operating in high-cost areas such as CanadaÔÇÖs oil sands.   Both Suncor and Petro-Canada have postponed projects in Alberta because oil prices are now too low to make them viable. Petro-CanadaÔÇÖs delayed Fort Hills project is one of the largest remaining undeveloped leases in the Athabasca oil sands region.   The deal is subject to approval by shareholders of both companies and government agencies.   *┬á┬á┬á┬á┬á┬á┬á┬á┬á *┬á┬á┬á┬á┬á┬á┬á┬á┬á *