Cenovus Energy Acquires MEG Energy in $5.68 Billion Oil Sands Merger
Written by Emily J. Thompson, Senior Investment Analyst
Source: WSJ
Cenovus Energy Acquisition: Cenovus Energy is acquiring MEG Energy for 7.9 billion Canadian dollars (approximately $5.68 billion) as part of a consolidation trend in Canada's oil industry.
Deal Structure: The acquisition is a cash-and-stock deal that includes debt, with MEG shareholders receiving C$27.25 per share—75% in cash and 25% in Cenovus stock.
Production Capacity: The merger will create a combined entity capable of producing around 720,000 barrels of oil per day, enhancing Cenovus's influence in Alberta’s oil sands.
Premium Offer: The deal offers a 33% premium over MEG's average price prior to a competing takeover bid from Strathcona Resources launched in May.
Analyst Views on MEG
Wall Street analysts forecast MEG stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for MEG is 33.50 USD with a low forecast of 32.00 USD and a high forecast of 36.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
6 Analyst Rating
4 Buy
2 Hold
0 Sell
Moderate Buy
Current: 22.240
Low
32.00
Averages
33.50
High
36.00
Current: 22.240
Low
32.00
Averages
33.50
High
36.00
About MEG
Montrose Environmental Group, Inc. is an environmental solutions company focused on supporting commercial and government organizations. Its Assessment, Permitting and Response segment provides scientific advisory and consulting services to support environmental assessments, environmental emergency response and recovery, toxicology consulting and environmental audits and permits for current operations, facility upgrades, new projects, decommissioning and development projects. Its Measurement and Analysis segment provides environmental testing and laboratory services in North America, including source and ambient air testing and monitoring, leak detection, and advanced multimedia laboratory services. Its Remediation and Reuse segment provides clients with engineering, design, and implementation services, primarily treatment technologies that treat contaminated water, remove contaminants from soil or create renewable energy from waste.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
