DEALMAKERS

Calgary-based Norton Rose Canada energy partner Chrysten Perry, 51, and securities senior partner Kevin Johnson, 56.

THE CLIENT

Malaysian state-owned oil and gas company Petroliam Nasional Berhad, which is known as Petronas.

THE DEAL

Petronas will acquire Calgary-based Progress Energy Resources Corp. in a deal valued at roughly $5.35 billion, including debt, Progress announced Thursday.

THE DETAILS

Kuala Lumpur–based Petronas will pay $19.78 in cash for each Progress share, or a total of roughly $4.6 billion. The price represents a premium of 77 percent over Progress’s Wednesday closing price. The deal is expected to close in September, following the approval by Progress shareholders and Canadian regulators. The agreement also calls for Petronas to receive a breakup fee of $147.2 million should Progress terminate the agreement in order to accept a rival offer.

THE BIG PICTURE

The two companies have a history together, with Petronas paying $1.1 billion last year to buy into a joint venture with Progress aimed at developing shale assets in the British Columbia-based Montney shale play. In acquiring Progress, Petronas is looking to further capitalize on the target’s access to natural gas assets throughout British Columbia and Alberta.

Western Canada has become a hotbed for energy deals involving foreign buyers, with companies overseas looking to cash in on an area rich in oil sands and shale assets. Petronas said in April that it planned to invest a sizable amount in the region, with The Globe and Mail noting that the Malaysian company is entering a crowded field of Asian investors that already includes several Chinese state-owned companies buying interest in regional assets.

Perry welcomes the attention from foreign investors, something she says signals that Canada is “open for business” when it comes to developing resources. “I think these developments in Canada—oil sands and [liquefied natural gas] developments—require huge capital commitment,” she says. “And to the extent that the parties can access capital from Asian companies, as well as expertise that they might have in the LNG area, is great for Canada.”

The deal announcement also included a lengthy section touting the deal’s benefits to Canada as a whole and the local community. Included is a promise that all of Progress’s Canadian employees will be retained when the two companies combine businesses. Due to Canada’s strict foreign investment regulations, Petronas and Progress must convince Canadian regulators that the deal provides a net benefit to the country under the Investment Canada Act.

THE BACKSTORY

Petronas’s agreement to acquire Progress was signed almost exactly one year after Perry and Johnson advised the Malaysian company on its entry into the joint venture with the Canadian energy outfit. At that time, Perry and Johnson were partners at MacLeod Dixon, a 250-lawyer Canadian firm known for its oil and gas expertise that officially merged with Norton Rose to become Norton Rose Canada at the start of this year. When the joint venture was announced last June, it marked the first work MacLeod Dixon had done from its Calgary headquarters for Petronas. Previously, attorneys in the firm’s Latin American offices had handled such assignments.

(Prior to the merger, Norton Rose’s London office advised Petronas subsidiary Star Energy Group plc on a $180 million acquisition of Marathon Oil Ireland Limited, in 2009.)

ON CLOSING

Though the firm’s name may have changed since the last time Perry and Johnson completed a deal for Petronas, Perry says the two transactions had common elements. “It was very similar to this one. It was very complex negotiations over a two- to three-month period with some of the same lawyers on the other side that we have on this transaction,” Perry says, noting Calgary firm Burnet, Duckworth & Palmer‘s representation of Progress on both transactions.