China's largest oil independent has announced the biggest takeover of a Canadian energy firm since CNOOC-Nexen.
Yanchang Petroleum International Ltd has agreed to pay C$232m ($220m) for Canada’s Novus Energy Inc.
The takeover bid will see the Chinese firm pay C$1.18 per share for Novus – 42% more than Novus’ closing price on the day of the announcement.
The purchase echoes the $15.2bn deal between Nexen and CNOOC last year, which drew much media attention, particularly from US and Canadian nationalists and conservationists and saw the Canadian Government apparently drawing a close to any similar deals.
After the CNOOC-Nexen deal, Canadian Prime Minister Stephen Harper stressed that the decision to approve the deal was “not the beginning of a trend [of acquisitions] but rather the end of a trend.”
The acquisition by China’s fourth-largest oil company will not face the same level of scrutiny as the CNOOC-Nexen takeover, however. According to the Investment Canada Act, the threshold at which foreign state-owned enterprises require approval is $330m. As Yanchang is not state-owned, the cash purchase should not require lengthy government approval.