The value of mergers and acquisitions (M&As) in Canada jumped in the fourth quarter of 2020, thanks to the blockbuster deal between Cenovus Energy and Husky Energy, GlobalData's deals database has shown.
All M&A transactions in Canada in the fourth quarter last year were worth US$10.01 billion, up by 468.3 percent from the previous quarter and a surge of 504.2 percent compared to the last four quarter average of US$1.66 billion, according to data from GlobalData cited by World Pipelines.
The single largest deal was the US$7.77 billion merger of Cenovus Energy and Husky Energy, followed by the US$703.1 million acquisition of Torc Oil and Gas by Whitecap Resources, the data showed.
Globally, Canada accounted for 13.7 percent of the value of all oil and gas industry M&A deals.
Just like the U.S. shale patch, consolidation in Canada's oil industry gained momentum at the end of October with a mega-merger that created the country's third-biggest oil producer and the fourth-largest oil firm by market capitalization. Cenovus Energy and Husky Energy agreed to combine their businesses in an all-stock deal to become a leaner, stronger, and more integrated company better positioned to withstand the current downturn, as Cenovus president and chief executive Alex Pourbaix said.
According to data from Evaluate Energy, deals in the United States and Canada accounted for around 84 percent of the $93 billion in upstream deals worldwide in the fourth quarter, with Canada representing 21 percent of global upstream M&As.
"Canada made up 25% of all North American deals thanks primarily to the major oilsands merger of Cenovus Energy and Husky Energy and a handful of lower-value corporate acquisitions by Whitecap Resources and Tourmaline Oil," said Eoin Coyne, Senior M&A Analyst at Evaluate Energy.
"This was the first time Canada accounted for more than 20% of both North American deal totals and global deal totals since Q2 2018," Coyne added.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More