ADNOC Consortium Proposes $18.7 Billion Takeover of Santos
Santos shares jumped sharply by more than 15% on Monday after an Abu Dhabi National Oil Company (ADNOC)-led consortium submitted a non-binding takeover proposal valued at $18.7 billion. This sudden surge marks the largest one-day increase in Santos' stock price since April 2020.
Details of the Takeover Offer
The consortium, spearheaded by ADNOC's investment arm XRG, includes the Abu Dhabi Development Holding Company and the global private equity giant Carlyle Group. The group has put forth a cash offer of AU$8.89 (approximately $5.76 USD) per share, representing a hefty 27.73% premium compared to Santos’ closing price of AU$6.96 last Friday.
This bid follows two earlier confidential, non-binding proposals made by the same consortium in March, signaling serious interest in acquiring the Australian oil and gas producer.
Santos Board Supports the Bid
The Santos board has expressed intent to unanimously recommend shareholders approve the offer, provided no superior proposal arises. The endorsement highlights the significant value the consortium’s bid presents, especially in the context of Santos' recent struggles to attract buyers due to subdued share price performance.
Strategic Appeal of Santos
For ADNOC and its partners, acquiring Santos offers strategic access to key energy assets, including two major Australian liquefied natural gas (LNG) facilities: Gladstone LNG on the east coast and Darwin LNG in northern Australia. The acquisition also includes stakes in Papua New Guinea LNG and the undeveloped Papua LNG project, providing long-term growth potential.
Despite previous unsuccessful takeover attempts and stalled merger plans with another Australian energy firm, Santos remains an attractive target due to its valuable LNG portfolio and geographic reach in the Asia-Pacific region.
Implications for the Energy Sector
This proposed transaction reflects ADNOC’s broader strategy to expand its global footprint, particularly in the Asia-Pacific energy market. With an enterprise value exceeding $80 billion, XRG is actively pursuing strategic investments, and the Santos bid fits squarely within this ambition.
The takeover attempt illustrates growing interest from Middle Eastern investors in Australian energy assets, driven by strong LNG demand and regional energy security concerns.
This acquisition, if completed, could reshape the Australian energy landscape and signal increasing cross-border consolidation in the oil and gas sector.
