CNOOC to buy Canada’s Nexen in biggest Chinese takeover

China National Offshore Oil Corporation is on the verge of completing the biggest foreign corporate acquisition in Chinese history.

State-owned CNOOC plans to buy Canadian oil and gas company Nexen, Inc for US$15.1 billion, or US$27.50 cash per share, a 61% premium over Nexen’s closing price in New York on July 20.

The move is the most ambitious acquisition by a Chinese company into North American energy since a 2005 attempt to buy U.S. oil company Unocal for US$18.5 billion was stopped by a political backlash in the USA.

The proposed takeover will place in Chinese hands the largest crude stream that feeds into the physical Brent benchmark. The acquisition would not only increase China's say in the Brent benchmark and would also give it access to Nexen's expertise in shale gas exploration.

This would be a huge gain for CNOOC, which hopes to develop shale gas domestically but lack the sufficient technology to do so.

Nexen, whose assets include conventional oil and gas, oil sands and shale gas, has been seen for some time by investment bankers as a potential takeover target.

CNOOC is one of the major national oil companies of China and is the third-largest national oil company. CNOOC focuses on the exploitation, exploration and development of crude oil and natural gas offshore of China.

Nexen is an oil and gas company based in Calgary that has operations located around the world, including the North Sea in Europe, Colombia, the Gulf of Mexico, and Alberta's Athabasca Oil Sands.