Cenovus Energy Inc. (TSX:CVE) entered into an agreement to acquire Husky Energy Inc. (TSX:HSE) from Hutchison Whampoa Europe Investments S.à r.l., L.F. Investments S.à r.l. and others for $3.9 billion on October 24, 2020. Under the terms of the definitive agreement, Husky shareholders will receive 0.7845 of a Cenovus share plus 0.0651 of a Cenovus share purchase warrant at an exercise price of CAD 6.54 per share in exchange for each Husky common share. In addition, if Husky preferred shareholder approval is obtained, each Husky preferred share will be exchanged for one Cenovus preferred share. Following the close of the transaction, and prior to the exercise of any warrants issued to Husky shareholders as part of this transaction, Cenovus shareholders will own approximately 61% of the combined company, and Husky shareholders will own approximately 39%. Hutchison Whampoa Europe Investments S.à r.l. and L.F. Investments S.à r.l. will respectively hold approximately 15.7% and 11.5% of the combined company. The arrangement agreement provides for a termination fee of CAD 240 million payable to Husky (in the case of Cenovus) and CAD 150 million payable to Cenovus (in the case of Husky) in certain circumstances if the arrangement is not completed and the arrangement agreement is terminated.

Alex Pourbaix, the current President & Chief Executive Officer of Cenovus, will serve as President and Chief Executive Officer of the combined company, Jeffrey R. Hart, the current Chief Financial Officer of Husky, will serve as Executive Vice-President & Chief Financial Officer, Jonathan M. McKenzie, the current Executive Vice-President & Chief Financial Officer of Cenovus, will serve as Executive Vice-President & Chief Operating Officer and Keith A. MacPhail, the current Chair of the board of directors of Cenovus, will serve as independent Board Chair of the combined company. The remainder of senior management will be selected from each of Cenovus and Husky and named prior to the completion of the Arrangement. Andrew Dahlin as Executive Vice-President, Safety & Operations Technical Services, Norrie Ramsay as Executive Vice-President, Upstream – Thermal, Major Projects & Offshore, Kam Sandhar as Executive Vice-President, Strategy & Corporate Development, Sarah Walters as Executive Vice-President, Corporate Services, Drew Zieglgansberger as Executive Vice-President, Upstream – Conventional & Integration, Rhona DelFrari as Chief Sustainability Officer & Senior Vice-President, Stakeholder Engagement and Gary Molnar – Senior Vice-President Legal, General Counsel & Corporate Secretary. The Board of Directors of the combined company following completion of the Arrangement will consist of eight members of the current Cenovus Board, including Keith A. MacPhail (as Independent Board Chair) and Alex J. Pourbaix, with Keith M. Casey, Jane E. Kinney, Harold N. Kvisle, Richard J. Marcogliese, Claude Mongeau, and Rhonda I. Zygocki expected to continue as members of the combined company's board of directors, and four members of the current board of directors of Husky, with Canning K. N. Fok, Eva L. Kwok, Wayne E. Shaw and Frank J. Sixt being the members expected to join the combined company's board of directors. The combined company will operate as Cenovus Energy Inc. and remain headquartered in Calgary, Alberta.

The transaction is subject to approval of not less than 66 2/3% of the votes cast by holders of Husky common shares and holders of options to acquire Husky common shares voting together as a single class, approval of a majority of the votes cast by holders of Cenovus common shares, holders of not more than 10% of the Husky Common Shares having validly exercised, and not withdrawn, dissent rights, regulatory approvals,  including Competition Act Approval, the HSR Approval, the CTA Approval and the Foreign Investment Clearance, conditional approval of the listing of the Cenovus common shares and Cenovus warrants issued to Husky common shareholders on the Toronto Stock Exchange ("TSX") and the New York Stock Exchange ("NYSE"), interim order shall have been granted in form and substance satisfactory to each of Cenovus and Husky, approval of the Court of Queen's Bench of Alberta and other customary closing conditions. The transaction has been unanimously approved by the Boards of Directors of Cenovus and Husky. The transaction is not conditional on Husky preferred shareholder approval and, if not obtained, the Husky preferred shares will remain outstanding in a subsidiary of the combined company. The TSX has conditionally approved the listing of the Cenovus Common Shares and the Cenovus Warrants to be issued to Husky Common Shareholders pursuant to the Arrangement, the Cenovus Common Shares issuable upon exercise of the Cenovus Warrants and Cenovus Replacement Options, and the Cenovus Preferred Shares to be issued to the Husky Preferred Shareholders pursuant to the Arrangement. Listing is subject to Cenovus fulfilling all the listing requirements of the TSX. The NYSE has authorized the listing of the Cenovus Common Shares and the Cenovus Warrants to be issued pursuant to the Arrangement and the Cenovus Common Shares issuable upon exercise of the Cenovus Warrants and Cenovus Replacement Options, subject to shareholder approval of the Arrangement and that the Cenovus Warrants will meet the distribution standards of the applicable rules of the NYSE upon listing. Listing will be subject to Cenovus fulfilling all the listing requirements of the NYSE. As of October 29, 2020, the special shareholder meeting of Husky and Cenovus is expected to be held in December 2020. As per amended filing, the Husky virtual meeting will be held on December 15, 2020. As of December 15, 2020, Husky and Cenovus shareholders approved the transaction. As of December 16, 2020, Court of Queen's Bench of Alberta has issued a final order approving the acquisition. As of December 21, 2020, Cenvous and Husky have obtained all of the key regulatory approvals for the consummation of the transaction. The transaction expected to close in the first quarter of 2021. As of December 21, 2020, the transaction is expected to close on January 1, 2021. The transaction is expected to be accretive to all shareholders on cash flow and free funds flow per share.

RBC Dominion Securities Inc. and TD Securities Inc. acted as financial advisors and fairness opinion providers to the Board of Directors of Cenovus. John E. Piasta, Harinder S. Basra, Colin R. Perry, Beth Riley, Brent W. Kraus, Anu Nijhawan, Thomas W. McInerney, Ashley M. White, Mark Rasile, Carl Cunningham, Mike Theroux and Shawn M. Munro of Bennett Jones LLP and Adam Givertz, Andrew Foley, Steve Centa, Robert Holo, Jean McLoughlin, Rachel Fiorill, Peter Jaffe, Richard Elliott, Lisa Krausz Eisenberg and Marta Kelly of Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as legal advisors to Cenovus. Goldman Sachs Canada, Inc. and CIBC World Markets, Inc. acted as financial advisors and fairness opinion providers to Husky. Daniel G. Kolibar, Justin Sherman, Donald Gilchrist, Shuli Rodal, Kaeleigh Kuzma and Tristram Mallett of Osler, Hoskin & Harcourt LLP and Chris Hilbert of Norton Rose Fulbright US LLP acted as legal advisors to Husky. Elizabeth Breen, John Ciardullo and J.R. Laffin of Stikeman Elliott LLP acted as legal advisor to Hutchison Whampoa Europe Investments. Marvin Yontef of Bennett Jones LLP acted as legal advisor to L.F. Investments. June Dipchand and Michael Leiter of Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisor to certain shareholders of Husky Energy including Hutchison Whampoa Europe Investments. Kingsdale Advisors acted as proxy solicitor and Computershare Investor Services Inc. acted as transfer agent and registrar to Cenovus. Computershare Trust Company of Canada acted as transfer agent and registrar to Husky. KPMG LLP acted accountant for Cenovus.

Cenovus Energy Inc. (TSX:CVE) completed the acquisition of Husky Energy Inc. (TSX:HSE) from Hutchison Whampoa Europe Investments S.à r.l., L.F. Investments S.à r.l. and others on January 1, 2021. With the close of the transaction, Husky has become a wholly owned subsidiary of Cenovus. The Husky common shares and preferred shares are expected to be delisted by the TSX at the close of market on January 5, 2021. The Cenovus warrants and Cenovus preferred shares are expected to commence trading on the TSX at the opening of market on January 6, 2021 and the Cenovus warrants are expected to begin trading on the NYSE at the opening of market on January 6, 2021.