If the bid is successful – it still requires shareholder and regulatory approval – it would be the largest foreign acquisition by a Chinese company yet, the Wall Street Journal reported.
CNOOC, which is controlled by the Chinese government and is the energy-hungry country’s largest offshore oil producer by output, is offering $27.50 a share, representing a 61 percent premium to Nexen’s closing share price on Friday, Reuters reported.
According to Bloomberg, Nexen’s board has recommended its shareholders accept the offer.
CNOOC also promised to keep all the employees and make Canada the home base for its Western Hemisphere operations, Reuters said.
Nexen’s shares were up 52.4 percent at $26.01 in early afternoon trade.
The deal is the biggest foreign foray by a Chinese company since CNOOC’s ultimately unsuccessful $18.5 billion bid for US oil giant Unocal in 2005, which faced strong political opposition (which might explain CNOOC’s generous offer price for Nexen).
Nexen has oil sands – heavy oil found in clay and sand – operations in Alberta, shale gas in British Columbia and exploration holdings in the North Sea, Gulf of Mexico and offshore West Africa.
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