Calgary-based Cenovus Energy Inc. will buy Husky Energy Inc. in an all-stock transaction valued at $23.6 billion.
Oil and gas mergers typically add sublease space to the market, and Cenovus confirmed that because of the “inevitable overlaps and redundancies in mergers of this type …they have identified $600 million in operating and corporate cost reductions, with a significant portion of that achieved through workforce reductions”.
The Cenovus-Husky merger is the latest consolidation in an energy sector that has been battered by the twin crises of the economic slowdown and low oil prices. Last week, ConocoPhillips announced that it was buying Concho Resources in a deal valued at $9.7 billion. Paramount Resources Ltd. recently purchased a 17.6% in Calgary oil and gas producer NuVista Energy Ltd.