Cenovus Energy Inc. has signed a cash-and-stock deal to buy MEG Energy Corp. that values the company at $7.9 billion, including debt. The deal comes after Strathcona Resources Ltd. made an unsolicited offer for MEG in May that the company urged shareholders to reject.

Cenovus Energy said its proposed buyout of rival MEG Energy will unlock hundreds of millions of dollars in savings by consolidating their neighboring oil-sands operations in Alberta.

Cenovus Energy Inc. (NYSE:CVE) said Thursday it will acquire MEG Energy Corp. (OTC:MEGEF) in a cash-and-stock deal valued at $7.9 billion, including debt, creating one of the largest players in Canada’s oil sands sector.