Cenovus buys Husky

Article Excerpt

CENOVUS ENERGY, $4.78, remains a buy for patient investors. The company (Toronto symbol CVE; Shares outstanding: 1.2 billion; Market cap: $5. billion; TSINetwork Rating: Average; No dividends paid; www.cenovus.com) has agreed to acquire rival oil producer Husky Energy Inc. (Toronto symbol HSE) for $3.8 billion in a friendly, all-stock takeover. The combined firm will be Canada’s third-largest producer of oil and gas with output of about 750,000 barrels of oil equivalent a day. It will also be the country’s second-largest refiner, with a total capacity of 660,000 barrels a day. Cenovus shareholders will own 61% of the combined company, with Husky shareholders holding the other 39%. The merger will let Cenovus save $600 million a year by eliminating overlapping operations, including cutting 25% of the combined firm’s workforce. It also aims to cut $600 million a year in capital expenditures. Cenovus Energy is a buy. buy…

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