TORONTO (Reuters) - Malaysia’s state oil company on Thursday agreed to buy Canada’s Progress Energy Resources Corp (PRQ.TO) for C$4.8 billion ($4.7 billion) to bolster its reserves of natural gas for export to Asian markets.
The deal by Malaysia’s Petronas follows its formation of a joint venture with Progress last year to develop a part of Progress Energy Resources Corp’s Montney shale assets in the foothills of northeastern British Columbia. Progress owns shale fields in the provinces of British Columbia and Alberta.
Petronas PETR.UL said its Canadian subsidiary, Petronas Carigali Canada Ltd, would pay C$20.45 for each share of Calgary-based Progress. That represents a 77 percent premium to Progress Energy’s Wednesday close.
Including debt, the transaction is valued at about C$5.5 billion, the companies said in a statement on Thursday.
“The proposed transaction will combine Petronas’ significant global expertise and leadership in developing LNG infrastructure with Progress’ extensive experience in unconventional resource development to build a strong and growing, world-class energy business based in Canada,” Datuk Anuar Ahmad, head of the gas and power business for Petronas, said in a statement.
In April, Progress denied it was in talks with Petronas, after news emerged that it was considering a proposal to buy the Canadian natural-gas producer.
Last year Petronas paid C$1.07 billion ($1.08 billion) for a half interest in shale-gas fields owned by Progress, and the two pledged to study the feasibility of exporting liquefied natural gas to Asia.
Shares of Progress closed at C$11.55 on Wednesday on the Toronto Stock Exchange, near the midpoint of their trading range over the past 52 weeks.
Reporting By Euan Rocha in Toronto and Aftab Ahmed in Bangalore; Editing by Maju Samuel