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Husky shareholders back friendly takeover by Cenovus for $3.8 billion in shares

Last Updated Dec 15, 2020 at 4:48 pm MST

Cenovus CEO Alex Pourbaix announces a multi-year initiative focused on Indigenous communities near the company's oil sands operations in northern Alberta, at a news conference in Calgary, Alta., Thursday, Jan. 30, 2020.THE CANADIAN PRESS/Jeff McIntosh

CALGARY — Husky Energy Inc. shareholders have approved a $3.8-billion all-share takeover bid by rival Cenovus Energy Inc., hours before Cenovus shareholders are widely expected to do the same.

The endorsement by Husky investors was resounding, with more than 95 per cent of votes cast in favour of the acquisition.

Frank Sixt, a director of Husky Energy, told a special shareholder meeting today he’s confident the new company will be more competitive, profitable and sustainable.

Cenovus CEO, Alex Pourbaix says the vote is a “defining moment” for the energy firms that will create a stronger, more competitive, efficient and profitable company.

The acquisition comes at a pivotal time in Canada’s energy sector as the collapse in oil prices and global pandemic puts pressure on the oil and gas industry.

WATCH: Fallout of Cenovus-Husky mega merger, and the trends to come

The combined company would create the third-largest Canadian oil and natural gas producer by total production, one that Pourbaix says will better weather energy market volatility while generating more cash flow, reducing debt and cutting overall costs.

The transaction has been approved by both boards and is expected to close in the first quarter of 2021, pending both shareholder and regulatory approvals.

Unfortunately, the deal means about 2,100 jobs in Calgary are likely to be eliminated.

This report by The Canadian Press was first published Dec. 15, 2020.

Companies in this story: (TSX:CVE, TSX:HSE)

The Canadian Press