Canadian energy firm Suncor plans to boost its oil sands portfolio through a merger with Petro-Canada that will see the combined entity - to operate under the Suncor name - become Canada's largest energy company.

The deal will give Suncor the largest oil sands resource position and a stake in every major oil development on Canada's east coast. "The takeover and resulting cost savings are likely to give new impetus to the ailing oil sand business," says a research note from Commerzbank analysts.