Canada: Cenovus to acquire MEG Energy in $5.7-billion deal

Canada

CALGARY, August 22, 2025 – Cenovus Energy has agreed to acquire MEG Energy for USD 5.7 billion in cash and stock, the company said on Friday.

The acquisition consolidates two leading SAGD oil sands producers with combined production exceeding 720,000 barrels per day and complementary assets in Christina Lake, Alberta.

Cenovus will pay MEG shareholders CAD 27.25 (USD 20) per share, 75% in cash and 25% in Cenovus shares.

The deal includes assumed debt and is expected to yield over CAD 400 million (USD 295 million) in annual synergies by 2028. Cenovus has secured CAD 5.2 billion (USD 3.8 billion) in committed financing from Canadian Imperial Bank of Commerce and JP Morgan Chase Bank to support the transaction.

“This transaction represents a unique opportunity to acquire approximately 110,000 barrels per day of production within some of the highest quality, longest-life oil sands resource in the basin,” Cenovus president and chief executive officer Jon McKenzie said.

Cenovus expects the transaction to be immediately accretive to adjusted funds flow per share and free funds flow per share. Pro forma net debt is forecasted at approximately CAD 10.8 billion (USD 7.9 billion), less than one times adjusted funds flow at strip pricing.

The boards of both companies have unanimously approved the deal, which is expected to close in Q4 2025 pending shareholder and regulatory approval.

Cenovus Energy is a Canadian integrated oil and natural gas company headquartered in Calgary. It focuses on oil sands projects in Alberta and also operates upstream and downstream assets in North America.

MEG Energy is a Canadian oil sands producer headquartered in Calgary. It specialises in steam-assisted gravity drainage production in the Christina Lake region of Alberta.

Photo of MEG’s Christina Lake facility courtesy of MEG