The past couple of months saw a heated corporate battle for MEG Energy Corp. (TSX:MEG) , beginning when Cenovus Energy Inc. (TSX:CVE)(NYSE:CVE) announced a friendly $7.9 billion acquisition (including assumed debt) on August 22, 2025. The initial cash and stock offer valued MEG at $27.25 per share, with consideration structured as 75% cash and 25% Cenovus stock. The acquisition was positioned to create a pre-eminent steam-assisted gravity drainage (SAGD) oil sands producer, combining adjacent assets at Christina Lake to unlock over $400 million in annual synergies by 2028. This move would help improve efficiency and profitability.
However, Cenovus wasn’t the only one interested in MEG. A hostile bid emerged from Canadian oil company Strathcona Resources (TSX:SCR). Strathcona, backed by Waterous Energy Fund and controlling 14.2% of MEG shares, launched an all-stock offer initially valued at C$30.86 per share. Strathcona’s executive chair publicly criticized Cenovus’s bid as undervaluation and accused the company of using “fear and misrepresentation,” turning the contest into what Cenovus CEO Jon McKenzie called a “bit of a circus”. Cenovus countered by highlighting that Strathcona’s all-stock offer was high-risk, as its shares were illiquid and potentially overvalued.
The contest concluded swiftly after Cenovus sweetened its offer on October 7, 2025. Cenovus increased the aggregate purchase price and changed the consideration mix to a maximum of 50% cash and 50% Cenovus shares, reflecting shareholder preference for greater participation in the combined company. The fully pro-rated consideration was valued at approximately $29.80 per MEG share, and Cenovus declared it its “best and final offer”.
Today, the acquisition stands unopposed. Two days after Cenovus amended its offer, Strathcona abandoned its takeover pursuit. Cenovus has received key regulatory approvals from the Canadian Competition Bureau and the US Federal Trade Commission. The transaction, which Cenovus now values at $8.6 billion including assumed debt, is expected to close in the fourth quarter of 2025, pending approval by MEG shareholders at a postponed meeting scheduled for October 22, 2025.