25th July 2012
Provided by City Index
CNOOC, the largest offshore oil producer in China, stands on the verge of creating history as they edge closer to completing a deal to buy Canadian firm Nexen in a deal worth $15.1billion (£9.7billion).
Reports emerged on Monday of what will represent China's biggest foreign business takeover if it gains approval from the Canadian government.
A cash offer of $27.50 per share has been tabled by China's third-largest oil company and this represents a 61% increase on Nexen's share price when the markets closed last Friday.
Wang Yilin, CNOOC Limited Chairman, hailed the potential deal in a statement, as he said: "This is an exciting opportunity for us to build on our existing joint venture relationship with Nexen in Canada, and to acquire a leading international platform in the process.
"We strongly believe that this acquisition will create long-term value for CNOOC Limited's shareholders."
Nexen CEO Kevin Reinhart added: "CNOOC Limited is one of the largest independent oil and gas exploration and production companies in the world.
"This transaction will allow for significant investment in our business and opens the door to new opportunities for our employees."
The spotlight now turns on the Canadian government, who have the power to block the move should they wish to, as they did in 2010 when BHP Billiton launched a $39 billion takeover of Potash Corp, the world's largest fertilizer enterprise.
Joshua Raymond, Chief Market Strategist at London spread betting firm City Index commented "this is a hefty deal for Nexen's shareholders given the huge premium on offer. The move marks another giant leap of Chinese business to leave its shores and become global playmakers through acquisitions abroad."