In a rare and dramatic shakeup of Calgary’s oil patch, Strathcona Resources Ltd. has launched an unsolicited takeover bid — aka a hostile takeover — for MEG Energy Corp., setting the stage for one of the largest and most closely watched battles for corporate control in recent memory.
The proposed acquisition, valued at approximately $6 billion, would unite two of the country’s largest heavy oil producers into what would become Canada’s fifth-largest oil company by output. The offer comes after MEG rebuffed a friendly merger proposal from Strathcona in April.
Strathcona, controlled by prominent Calgary financier Adam Waterous, announced Thursday it intends to formally table a cash-and-stock bid of $23.27 per MEG share, representing a 9.3% premium over MEG’s May 15 closing price.
The news immediately jolted markets. MEG shares surged more than 22% in early trading Friday, rising well above the implied bid value — a signal that investors are anticipating a potential bidding war or a higher revised offer.
Strathcona shares, meanwhile, edged slightly lower.
MEG’s board responded on Friday, urging shareholders to take no action, stating that it had not yet received a formal bid. The company has retained BMO Capital Markets and Burnet, Duckworth & Palmer LLP as financial and legal advisors.
The two companies are roughly equal in value when adjusted for currency differences, with MEG trading at a $5.4 billion market cap and Strathcona valued at $6.6 billion. Strathcona already owns 9.2% of MEG following quiet share purchases over recent months.
The takeover is being viewed as a rare hostile move in Calgary’s traditionally tight-knit oil community, where mergers are often negotiated behind closed doors.
The deal would not only reshape Canada’s oil sector but also significantly advance Strathcona’s ambition to become a dominant player in heavy oil following its $2.84 billion divestiture of Montney gas assets this week.
The company also recently acquired the Hardisty crude-by-rail terminal in Alberta for $45 million, giving it strategic control over export logistics.
Adam Waterous, whose Waterous Energy Fund is the architect behind Strathcona’s meteoric rise, is a well-known figure in Canadian finance with ties to the federal Conservative movement.
His fund has signalled confidence in the bid, committing to subscribe for an additional 21.4 million Strathcona shares via a new investment round.
A successful merger would create a heavy oil giant with production exceeding 300,000 barrels per day, making it the fourth-largest steam-assisted gravity drainage (SAGD) producer in Canada.
Strathcona claims the combined company could unlock $175 million in annual synergies, including $50 million in overhead cost reductions.
Importantly, MEG is also a member of the Pathways Alliance, a consortium of Canadian oil producers proposing one of the largest carbon capture and storage (CCS) projects in the world.
Any change in ownership could influence both MEG’s role in the alliance and the broader trajectory of Alberta’s emissions reduction strategy.
In a statement, Strathcona said it would support a "strategic alternatives" process by MEG’s board to explore “superior” offers — provided it is not subject to a standstill agreement.
The company is also prepared to sign a mutual confidentiality agreement to exchange non-public information and facilitate what it calls “constructive” negotiations.
If successful, the takeover would mark a bold consolidation of Alberta’s oil sands sector, just as industry leaders brace for growing geopolitical tensions, regulatory uncertainty, and energy transition pressures.
Whether MEG will accept the deal — or find a white knight — remains the central question in what has become Calgary’s most compelling corporate drama of 2025.