Suncor buys Petro-Canada for $13.7b

Suncor Energy Inc, the world's second-largest oil-sands producer, agreed to buy Petro-Canada for about C$16.9 billion ($13.7 billion) in an all-share transaction to create the biggest Canadian energy company.

Owners of Petro-Canada will receive 1.28 shares of the merged company for each of their shares while holders of Suncor will get one share for each held, according to a statement yesterday by the two companies, both based in Calgary. The deal is priced approximately 25 percent above Petro-Canada's 30-day weighted-average trading level, it said.

The transaction will help cut expenses at the combined company and reduce Suncor's reliance on high-cost oil-sands mines after crude prices tumbled more than $100 a barrel from last year's record high. Suncor reported the first quarterly loss in its history in January and slashed its capital budget after prices plunged and costs jumped.