TORONTO -- Texaco Inc. of White Plains, N.Y., said Friday it had completed the sale of its interest in Texaco Canada Inc. to Imperial Oil Ltd., a unit of Exxon Corp., and Canada's government gave its approval to the sale.
Texaco said it sold its 78 percent interest in the Canadian subsidiary for $3.24 billion or $34.36 a share.
Payment for the shares was made by Imperial delivering notes to be paid on the same date as payment to shareholders tendering their shares under Imperial's tender offer, Texaco said. The payment date is set for Feb. 28.
In Ottawa, the government's Investment Canada agency approved the acquisition by Imperial, but the transaction was still under review under Canada's Competition Act.
Canadian Energy Minister Jake Epp said the merger will result in increased Canadian ownership and investment in the petroleum industry. He said Imperials has agreed to give Canadians an opportunity to purchase up to $550 million of upstream oil and gas properties.
Imperial has said, also, it would make about $700 million a year in capital expenditures, the government said. The government said that Imperial undertook to offer employment to all Texaco Canada employees.
It was announced Wednesday that Imperial Oil Limited signed an agreement for $2.1 billion in loans from a syndicate of 20 banks to help finance its purchase of Texaco Canada.
On Jan. 20, Texaco announced the sale of its 78 percent-owned Canadian subsidiary to Imperial.
Bidding for Texaco Canada, a crown jewel that analysts had expected to fetch more than $3 billion, began in August when Texaco announced it would sell the unit as part of a massive corporate restructuring undertaken when the No. 3 U.S. oil company emerged from year-long bankruptcy proceedings in April 1988.
Texaco Canada is the fourth-largest oil company in Canada, behind Imperial Oil, Shell and government-owned PetroCanada. Acquisition of Texaco Canada would make Imperial the largest refiner and marketer of petroleum products in Canada.
