China Daily reported that CNOOC Ltd has agreed to pay USD 15.1 billion in cash to acquire Nexen Inc, the Calgary-based oil and gas producer in the biggest overseas acquisition by a Chinese company.

According to its statement to the Hong Kong Stock Exchange, China largest offshore oil and gas explorer is paying USD 27.50 for each common share, a premium of 61% to Nexen's closing price on Friday.

Nexen's board has recommended the deal to its shareholders.

The deal is a second attempt by CNOOC to buy a large North American oil and gas producer after political opposition blocked the acquisition of Unocal Corp in 2005.

Mr Shi Yan a Shanghai based energy analyst at UOB-Kay Hian Ltd said "CNOOC did a nice job in adding oil reserves at less than USD 20 a barrel. He said that "It's really a good time to buy assets while crude prices are low and energy firms shed values in stock markets."

The statement said CNOOC will offer to buy Nexen preferred shares and the Canadian company debt of USD 4.3 billion will remain in place. CNOOC will pay for the acquisition using existing cash funds and external financing.

CNOOC said in the statement that "The acquisition of Nexen will expand the group's overseas business and resource base in order to deliver long-term sustainable growth."

It said "Nexen will complement the group's large offshore production footprint in China."

Source - China Daily

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