Rival Canadian Company Agrees To Buy Husky Energy In $2.9B Deal

Oil Companies Consolidate As Fuel Demand Crashes Due To Pandemic

Husky Energy sign
Danielle Kaeding/WPR

A rival Canadian oil and gas company has agreed to buy Calgary-based Husky Energy, the company that owns and operates Wisconsin’s only oil refinery in Superior, in a $2.9 billion deal.

Calgary-based Cenovus Energy Inc. and Husky announced the deal to combine two of the largest companies in Canada’s oil industry Sunday. The sector has been hit hard by the coronavirus pandemic. Husky reported around $1.5 billion in losses through the first six months of this year, as around 16 percent of Alberta’s crude oil production remains offline.

Alex Pourbaix, the president and CEO of Cenovus, said in a news release the combination would create a “leaner, stronger” company that’s able to weather challenges in the current market.

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“Bringing our talented people and complementary assets together will enable us to deliver the full potential of this resilient new company,” said Rob Peabody, Husky’s CEO and president in the release.

The deal follows others in the United States as companies have been forced to consolidate due to the global decline in demand for fuel, according to Reuters.

Husky has cut capital spending on projects this year, including its $750 million Superior refinery rebuild. That rebuild is in the wake of an April 2018 explosion that caused 36 people to seek medical care and some city residents to temporarily evacuate due to the on-site presence of hydrogen fluoride — a chemical that can be hazardous to humans if released.

Husky typically employs around 200 workers year-round at the Superior refinery.

The transaction agreement between Cenovus and Husky is valued at $17.9 billion, including debt. The boards of directors for both companies have signed off on the deal, which is expected to close early next year.