The Montreal Gazette reported that China’s CNOOC Ltd. (HKEX:0883) cut its dividend by 40 percent in preparation for its $15.1 billion acquisition of Nexen Inc. (TSX:NXY). CNOOC says that if the deal closes in Q4 2012, as is expected, its proven reserves and production will increase by 30 and 20 percent, respectively.
CNOOC’s net profit for the first half of 2012 dropped by nearly one-fifth.
As quoted in the market news:
CNOOC last month launched China’s richest foreign takeover bid by agreeing to buy Nexen, whose global portfolios include oil sands and shale gas.
CNOOC is confident it will win Canadian and U.S. regulatory approvals for the Nexen buy, Chairman Wang Yilin told reporters, adding the state-run Chinese company has no plans to divest any Nexen assets after the acquisition.
The deal has been clouded by accusations of insider trading by a company controlled by the chairman of shipbuilder China Rongsheng Heavy Industries Group Holdings Ltd. CNOOC executives said on Tuesday they were assisting the U.S. Securities and Exchange Commission in the case.