CHINA’S CNOOC has agreed to buy a Canadian oil group for $15.1 billion plus debt of $3.1 billion, the largest overseas acquisition by a Chinese company if completed.
Cnooc’s purchase of Calgary-based Nexen comes at a time when Chinese companies are scouring the world for resources during the global downturn.
Cnooc’s cash offer of $27.50 a share represents a 61 per cent premium to Nexen’s closing price last Friday and presents one of the biggest tests for a Chinese company since Cnooc’s failed 2005 bid for Unocal, the US energy company, for $18.5 billion. Cnooc dropped that bid after opposition from US politicians. Shares in Nexen were up more than 50 per cent in New York in the afternoon at $26.06.
Cnooc’s bid will require approvals from regulators in Canada, the US and Britain. The Chinese group has made concessions to meet Ottawa’s requirement that such deals constitute a “net benefit” to Canada.
The Calgary-based company has large oil sand and shale gas reserves in western Canada. It also has oil and gas assets in the North Sea, Gulf of Mexico and in waters off Nigeria. – (Copyright the Financial Times Limited 2012)
