China's CNOOC has signed a definitive agreement with Canada-based energy company Nexen, pursuant to which the former will acquire all of the outstanding common shares of Nexen for $27.50 per share in cash.

The company will pay total cash consideration of approximately $15.1bn to Nexen, which current debt of approximately $4.3bn will remain outstanding.

CNOOC will fund the transaction with existing cash resources and external financing, and is expected to complete the deal in the fourth quarter of 2012.

With the acquisition of Nexen, CNOOC is expected to enhance its presence in Canada, Nigeria and the Gulf of Mexico, and add a significant presence in the UK North Sea.

The agreement will also be expanded to include all of CNOOC North American and Caribbean assets.

CNOOC chairman Wang Yilin said, "This is an exciting opportunity for us to build on our existing joint venture relationship with Nexen in Canada, and to acquire a leading international platform in the process."

Nexen chairman of the Board Barry Jackson said, "The Nexen Board is unanimous in its view that the transaction is in the best interest of Nexen and recommends shareholders vote in favor of the transaction."

Following the transaction, CNOOC plans to establish the head office of its North and Central American operations in Calgary, and intends to retain Nexen’s current management team and employees.

CNOOC will also implement and enhance Nexen’s current planned capital expenditure program, and will continue to support oil sands research at Alberta universities and participate in the Canada’s Oil Sands Innovation Alliance.

CNOOC will retain the current management and employees of Nexen’s assets in the UK, US and other countries.