Suncor Energy formally placed a $3.3-billion bid to acquire investment company Canadian Oil Sands. Suncor’s intention is to boost production in Alberta, the company said in a release on Monday.

Suncor’s $3.3-billion Canadian Oil Sands bid

Canada

OTTOWA, October 5, 2015 – Suncor Energy formally placed a $3.3-billion bid to acquire investment company Canadian Oil Sands. Suncor’s intention is to boost production in Alberta, the company said in a release on Monday.

The bid includes buying Canadian Oil Sands’ outstanding shares for $3.3 billion and paying the company’s net debt of $2 billion. Suncor’s offer represents a 43-percent premium according to share prices at the close of Friday.

Canadian Oil Sands has a 36.74-interest in the Syncrude Project, which is the largest producer of synthetic oil from oil sands in Canada. Due to the downturn in oil prices, the company has been implementing cost cutting measures reporting a 17-percent decrease in operating expenses in the second quarter of 2015.

“We are offering a significant premium to Canadian Oil Sand’s current market price and also providing exposure to a meaningful dividend increase,” Steve Williams, president and CEO of Suncor, said in a company statement on Monday.

This move falls in line with Suncor’s ambitions to increase capacity after its agreement to purchase a 10-percent stake in the Fort Hills oil sands project for $234 million.