24 Jul 2012

China to buy Canadian company

9:55 am on 24 July 2012

Offshore oil producer CNOOC of China is poised to buy Nexen of Canada in a deal worth more than $US15 billion.

If approved, the deal would be China's largest foreign business takeover.

The offer of $US27.50 cash per share for Nexen is 60% higher than Friday's closing share price.

The board of Nexen has already approved the deal, but the takeover still needs to be cleared by the Canadian government.

The BBC reports CNOOC already operates a number of joint ventures with Nexen and says the deal will boost its oil reserves by 30%.

In 2005, CNOOC paid $US120 million for a 16.7% share of MEG Energy, an oil sand developer. And last November, CNOOC bought Canadian Opti Canada, another oil sands company, for C$2.1 billion.