(Reuters) -Canadian oil producer MEG Energy said on Friday it has agreed to be acquired by larger peer Cenovus Energy in a cash-and-stock deal worth C$6.93 billion, to create one of the largest oil sands companies in Canada.

In May, Canadian oil and gas producer Strathcona said it planned to launch a C$5.93 billion hostile takeover bid for MEG.

MEG Energy urged its shareholders in June to reject the hostile takeover offer, calling the bid inadequate and not in their best interest. The board also launched a strategic review to explore alternatives that could lead to a better offer.

Cenovus’ name was floated by analysts and in media reports as a possible white-knight buyer for rival oil sands producer MEG.

Under the transaction, each shareholder of MEG Energy will receive C$27.25 in cash

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