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Cenovus Energy is buying Husky Energy in an all-stock deal valued at $18 billion including debt, the latest step in a wave of industry consolidation amid a pandemic that has sapped oil prices and demand.

Why it matters: The agreement will create Canada's third-largest oil-and-gas producer, with 750,000 barrels of oil equivalent per day in combined production, the company said, which includes lots of oil-sands and heavy oil output.

  • The joint announcement Sunday says the deal, which both companies' boards have approved, will provide about $914 million worth of annual cost savings.
  • Cenovus CEO Alex Pourbaix, who will keep that job, said it will be a "leaner, stronger and more integrated company" that's well-equipped to weather the pandemic and do well in years ahead.

The big picture: It's the latest in a burst of big industry mergers lately as companies grapple with the pandemic that has battered the sector's finances.

The two companies reported over $410 million in combined second quarter losses.

  • The merger comes after several big deals that are bringing fresh U.S. consolidation, especially in shale. Last week brought the news that ConocoPhillips was acquiring Concho Resources and Pioneer Natural Resources was buying Parsley Energy.
  • Devon Energy and WPX Energy announced a merger in late September, and early this month Chevron completed its acquisition of Noble Energy, a deal unveiled in July.

Editor's note: This story has been updated to correct $914 billion in cost savings to $914 million.

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