March 23, 2009

Suncor, Petro-Canada in merger agreement

Canada's Suncor Energy Inc. officials announced an agreement for an all-stock acquisition of Petro-Canada, which was valued at $19.18 billion Monday.

Once given Parliamentary approval, the new entity that would operated using the Suncor brand would have a combined market capitalization of $43.3-billion, the Globe and Mail reported.

Under the deal, Petro-Canada shareholders would receive 1.28 shares of the merged company for every Petro-Canada share owned, while Suncor stockholders would receive a share in the new venture for each Suncor share owned.

Petro-Canada was created as a federal Crown corporation in 1975 by Liberal Prime Minster Pierre Trudeau, but Conservative Prime Minister Brian Mulroney began the process of privatizing it in 1991, and by 2004, the government was no longer a stakeholder.

Both companies have headquarters in Calgary, Alberta.