Nexen Inc. (NXY) has announced that U.S. regulators have approved CNOOC Limited (CEO)’s bid to buy it out. This was the last hurdle to the deal, which is now set to close the week of Feb. 25.
Nexen Inc. (NYSE:NXY) (TSE:NXY)’s takeover by CNOOC Limited (ADR) (NYSE:CEO) has received the approval of U.S. regulators, which is the last hurdle of the deal. Canadian regulators approved the deal in December, saying it was the last deal like it that they would approve.
CNOOC is one of the largest energy companies in China, and its deal to take over Nexen, which is worth $15.1 billion, is now set to close the week of Feb. 25, according to Reuters. Shares of Nexen rose 2 percent in trading at the New York Stock Exchange and jumped 60 cents on the Toronto Stock Exchange on Tuesday. The deal will pay each shareholder of Nexen $27.50 per share, and the stock’s value on both exchanges is around that value currently.
The deal is a key one for CNOOC Limited (ADR) (NYSE:CEO) because of the large amounts of global natural resources that are involved. Regulators in the European Union, the U.K. and China also had to approve the takeover.
After the deal closes, CNOOC will control the Long Lake oil sands project in Canada that’s currently owned by Nexen. It will also control billions of barrels of oil reserves. U.S. regulators had to approve it because CNOOC Limited (ADR) (NYSE:CEO) will also gain control of Nexen Inc. (NYSE:NXY) (TSE:NXY)’s holdings in the Gulf of Mexico.
It is not known if U.S. regulators imposed any conditions on the deal for their approval. The U.S. has been wary of Chinese investments in U.S. companies. It blocked CNOOC’s proposal to acquire Unocal Corp in 2005 because of national security concerns.