MONTREAL - Canadian oil company Suncor (IW 1000/125) will buy rival Canadian Oil Sands for Can$6.6 billion (US$4.55 billion) in stocks, the two announced Monday, ending a three-month standoff.

As part of the deal, Suncor agreed to raise its initial hostile bid from 0.25 to 0.28 of its own shares for one Canadian Oil Sands (COS) share.

This amount takes into account Canadian Oil Sands debt, which is valued at Can$2.4 billion.

Canada's largest petroleum producer, Suncor had launched a hostile bid in October for COS in order to get its hands on the latter's only asset -- a 36.7%  stake in the Syncrude consortium that owns western Canada's largest oil sands deposit.

Suncor already has a 12% stake in the consortium, which includes six other oil companies including ExxonMobil through its Canadian subsidiary Imperial Oil.

After initially spurning Suncor's advances, COS called the latest offer "fair" and is recommending it to shareholders.

The acquisition comes amid plunging oil prices and consolidation in Alberta oil sands, the third largest oil reserve in the world.

Copyright Agence France-Presse, 2016