Abu Dhabi state oil firm makes US$18.7 billion bid for Australia’s Santos
Abu Dhabi’s state-owned oil company, Abu Dhabi National Oil Company (ADNOC), is leading a takeover bid for Australian energy group Santos, valuing the company at US$18.7 billion. Both firms confirmed the development on Monday.
The board of Santos has indicated its plan to unanimously recommend ADNOC’s offer to shareholders, contingent on reaching an agreement on takeover terms.
Adelaide-based Santos operates across Australia, Papua New Guinea, East Timor, and the United States, and is a significant supplier of liquefied natural gas (LNG) in both Australia and Asia.
ADNOC, through a consortium led by its subsidiary XRG, has offered US$5.76 per share for all outstanding stock, which translates to a total company valuation of US$18.7 billion. This per-share price represents a 28 percent premium over Santos’ closing level on Friday.
Santos disclosed that this is the “final, non-binding” offer from the Middle Eastern oil company, following two lower confidential bids made in March. Following the announcement, Santos’ stock saw an increase of nearly 12 percent in early afternoon trading on the Australian Securities Exchange.
The consortium includes Abu Dhabi Development Holding Company and global investment firm Carlyle. In a statement, XRG expressed its intention to build upon Santos’ legacy as a trusted energy producer, aiming to “strengthen domestic and international energy security.” XRG further stated that “The proposed transaction is aligned with XRG’s strategy and ambition to build a leading integrated global gas and LNG business.”
Santos’ board reiterated its intention to “unanimously recommend” that shareholders vote in favor of the deal, provided terms are agreed upon and no superior offer emerges.
Last year, Santos and rival Australian energy firm Woodside Energy ceased discussions aimed at forming one of the world’s largest natural gas exporters.
According to a report by E&P Financial Group, Santos has been a rumored takeover target for over two years. The report suggested that the current timing for a takeover offer felt “opportune,” citing risks favoring higher energy prices and Santos’ completion of several major investment projects. E&P Financial also anticipated that the Santos bid would intensify focus on the value of liquefied natural gas assets, noting media reports of ADNOC’s interest in BP’s LNG and gas operations.
Santos stated that the “indicative proposal” from its Abu Dhabi suitor is subject to due diligence, agreement on terms, and approval from regulatory authorities in Australia, Papua New Guinea, and the United States.
The Middle East-led consortium affirmed its intention to maintain Santos’ headquarters in Adelaide. It also pledged to collaborate with existing Santos management to accelerate growth and support local jobs. The group articulated plans to invest in Santos’ gas and LNG business to provide “reliable and affordable low carbon solutions to customers in Australia, the Asia Pacific and beyond.” XRG specifically committed to ensuring Santos makes investments in carbon capture and storage projects, low-carbon fuels, and “other decarbonization initiatives.”
