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.

Cenovus Energy agreed to acquire MEG Energy in a cash and stock deal valued at C$7.9B (~US$5.7B) including debt, creating one of Canada's largest oil sands companies.