Published February 25, 2013
TORONTO – The contentious $15.1 billion takeover of Canadian oil and gas company Nexen Inc by Chinese state-owned entity CNOOC Ltd closed on Monday, more than seven months after China's largest-ever foreign takeover was announced.
Nexen, based in Calgary, Alberta, said in a statement on Monday that the deal had closed and that its shareholders would receive $27.50 in cash for each Nexen share.
Nexen said its common and preferred shares would be delisted from the Toronto Stock Exchange in a few days, while its common shares were expected to cease trading on the New York Stock Exchange prior to the market opening on Feb. 26.
The company said Kevin Reinhart would remain chief executive of Nexen, which will operate as a wholly owned subsidiary of CNOOC.
Nexen also said it would have a new board chaired by Li Fanrong, who is CEO of CNOOC. Other members of the new Nexen board will be Reinhart, Fang Zhi, Barry Jackson, Thomas O'Neill and William Berry.
The takeover, originally announced in July, won approval from Canadian regulators in December. Earlier this month, CNOOC overcame its last major hurdle after the deal was cleared by the Committee on Foreign Investment in the United States, which had a say because of Nexen's exploration and production assets in the Gulf of Mexico.
The two companies have not disclosed what conditions were imposed by Canadian and U.S. regulators for the deal to win approval, but one of CNOOC's advisors said the parameters around the assurances were largely in line with expectations.
"The level of detail that was negotiated and the time-frames of those commitments, that was a bit of a surprise though," said Dan Barclay, who heads BMO Capital Markets' Canadian M&A group, which acted as one of CNOOC's financial advisors on the deal.
"What they (CNOOC) had signed up for in the beginning, they got in the end, only it was a bit more rigorous than where we had started," said Barclay.
The Nexen acquisition gives CNOOC new offshore production in the North Sea, the Gulf of Mexico and off western Africa, as well as producing properties in the Middle East and Canada.
In Canada, CNOOC gains control of Nexen's Long Lake oil sands project in the oil-rich province of Alberta, as well as billions of barrels of reserves in the world's third-largest crude storehouse.