Husky makes $6.4B hostile bid to acquire MEG

A major merger could be in the works in Canada’s oil patch.

Husky Energy Inc. is making a hostile bid to acquire MEG Energy Corp. in a transaction valued at $6.4 billion.

In a statement issued Sunday afternoon, Husky says the proposed merger “will create a stronger Canadian energy company.”

The new, Calgary-based operation would have the capacity to produce more than 400,000 barrels of oil equivalent per day.

The proposal has been unanimously approved by Husky’s board of directors, and will be open for acceptance by MEG shareholders until Jan. 16.

Husky says MEG’s board refuses to discuss the deal, which led to the takeover bid.

“Husky is confident the proposed transaction is in the best interests of Husky and MEG shareholders, employees and stakeholders,” Husky CEO Rob Peabody said in a statement.

“However, to date, the MEG Board of Directors has refused to engage in a discussion on the merits of a transaction, giving us no option but to bring this offer directly to MEG shareholders.”

Husky says the combined company “will have an improved opportunity to accelerate new projects in Canada compared to two separate entities.”

It says it expects the deal to close in the first quarter of 2019, subject to regulator approval.