The $3.8-billion merger between Cenovus Energy and Husky Energy will result in a trimming of the workforce by as much as 25 per cent, CBC News has confirmed.
“The estimate is that the reductions will be approximately 20 per cent to 25 per cent of the combined workforce, which is about 8,600 employees and contractors,” Reg Curren, senior media advisor for Cenovus, said in an email to CBC News on Tuesday, two days after the merger was announced.
The majority of the job cuts of 1,720 to 2,150 positions are expected to take place in Calgary, where both firms are headquartered.
The new company will operate as Cenovus Energy and will be based out of Calgary.
“As with any merger of this type, there will be overlap and there will be some difficult decisions as we work to create a combined organization best positioned for the future,” Kim Guttormson, communications manager at Husky, said in an emailed statement.
Deal generally applauded
Cenovus CEO Alex Pourbaix said his company’s merger with rival Husky would create a new entity that’s stronger, more resilient and operating with ‘significantly reduced’ risk to market volatility. (Jeff McIntosh/The Canadian Press)
Cenovus CEO Alex Pourbaix said the merger would create a new entity that’s stronger, more resilient and operating with “significantly reduced” risk to market volatility.
His counterpart at Husky, CEO Rob Peabody, said the deal would allow the combined companies to “make better returns in a tougher environment.”
Analysts generally applauded the surprise Cenovus-Husky hookup for its operational advantages but criticized the plus-20-per-cent premium in the price for Husky.
Husky Energy president and CEO Robert Peabody said the two companies have talked about a merger for several years, but discussions picked up in March. (Jeff McIntosh/The Canadian Press)
“The deal does make strategic sense,” said Manav Gupta of Credit Suisse in a note to investors.
“Like U.S. E&P (exploration and production companies), Canadian energy companies also need to come together, cut costs and become leaner to better adapt to lower energy demand in [a] post-pandemic world.”
Both companies are carrying a relatively hefty amount of debt and that’s why joining forces made financial sense.
While the oilpatch has struggled for many years, this deal is happening in a remarkably unique time in the industry, with many companies bleeding money with historically low oil prices that even turned negative this year.
The oil pipeline and tank storage facilities at the Husky Energy oil terminal in Hardisty, Alta. Husky’s CEO says the combined company will be better able to achieve climate targets, such as the goal to have net-zero emissions by 2050. (Larry MacDougal/The Canadian Press)
Cenovus shares fell by as much as 15 per cent to $4.15 in Monday trading in Toronto before closing down 8.4 per cent at $4.47.
Husky, meanwhile, gained as much as 14.2 per cent to $3.62 before closing up 12 per cent at $3.55
Earlier in 2020, Cenovus and Husky shares had lost 63 per cent and 70 per cent of their value, respectively.
Cenovus expects to find savings of $1.2 billion.
More mega-mergers likely, analyst says
The all-share deal will likely spark more mega-mergers among Canadian oil and gas majors, according to a veteran oilsands analyst.
“This is likely just the start of big deals in Canadian energy land and thus it begs the question of who is next?” said analyst Phil Skolnick of Eight Capital in a report on Monday.
“As seen in the U.S. with the accelerated M&A activity, when there’s one meaningful transaction, there’s likely more to come.”
Several industry observers point to Calgary-based oilsands producer MEG Energy Inc. as the leading potential target, noting Husky’s failed $3.3-billion hostile takeover attempt of its smaller rival two years ago.
The Husky-Cenovus merger calls for Husky shareholders to receive 0.7845 of a Cenovus share plus 0.0651 of a Cenovus share purchase warrant in exchange for each Husky common share if the deal is concluded.
Cenovus shareholders would own about 61 per cent of the combined company and Husky shareholders about 39 per cent.
The transaction must be approved by at least two-thirds of Husky’s shareholders but Hong Kong billionaire Li Ka-Shing controls 70 per cent of Husky’s shares and has agreed to vote them in favour of the deal.
Third-quarter results expected this week
The announcement Sunday came just as Calgary’s oilsands companies are about to start rolling out third-quarter financial results, with Suncor Energy Inc. set to report Wednesday and both Cenovus and Husky scheduled to report on Thursday.
Alberta Energy Minister Sonya Savage said in a statement that she predicts opponents of Canada’s energy sector will “seize upon today’s news.”
“But projections show continued global demand for fossil fuels well into the future,” she said. “We believe that Canada should not cede that market to countries like Russia and Saudi Arabia.”
“As companies across the globe navigate unprecedented economic times, job restructurings are an unfortunate reality of weathering the storm.
TORONTO – Canada Goose Holdings Inc. says it has signed a deal that will result in the creation of its first eyewear collection.
The deal announced on Thursday by the Toronto-based luxury apparel company comes in the form of an exclusive, long-term global licensing agreement with Marchon Eyewear Inc.
The terms and value of the agreement were not disclosed, but Marchon produces eyewear for brands including Lacoste, Nike, Calvin Klein, Ferragamo, Longchamp and Zeiss.
Marchon plans to roll out both sunglasses and optical wear under the Canada Goose name next spring, starting in North America.
Canada Goose says the eyewear will be sold through optical retailers, department stores, Canada Goose shops and its website.
Canada Goose CEO Dani Reiss told The Canadian Press in August that he envisioned his company eventually expanding into eyewear and luggage.
This report by The Canadian Press was first published Sept. 19, 2024.
Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.
Here’s a timeline of key events in the bread price-fixing case.
Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.
Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.
Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.
Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).
Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.
June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.
Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”
Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.
July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.
Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.
This report by The Canadian Press was first published Sept. 19, 2024.
Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)
TORONTO – TD Bank Group, which is mired in a money laundering scandal in the U.S., says chief executive Bharat Masrani will retire next year.
Masrani, who will retire officially on April 10, 2025, says the bank’s, “anti-money laundering challenges,” took place on his watch and he takes full responsibility.
The bank named Raymond Chun, TD’s group head, Canadian personal banking, as his successor.
As part of a transition plan, Chun will become chief operating officer on Nov. 1 before taking over the top job when Masrani steps down at the bank’s annual meeting next year.
TD also announced that Riaz Ahmed, group head, wholesale banking and president and CEO of TD Securities, will retire at the end of January 2025.
TD has taken billions in charges related to ongoing U.S. investigations into the failure of its anti-money laundering program.
This report by The Canadian Press was first published Sept. 19, 2024.
