Abu Dhabi’s state-owned oil company has launched a bold move to build global gas giant status by bidding for Australia’s Santos. The offer, valued at US$18.7 billion, aims to secure all outstanding shares in Santos at US$5.76 each. Notably, this offer represents a 28 percent premium over Santos’ last closing price.
Furthermore, the energy heavyweight Abu Dhabi National Oil Company (ADNOC) submitted the offer through a consortium led by its subsidiary XRG. Additionally, the group comprises Abu Dhabi Development Holding Company and the global investor Carlyle. Together, these partners hope to leverage Santos’ regional influence and expand their reach worldwide.
Santos, based in Adelaide, has assets in Australia, Papua New Guinea, East Timor, and the United States. As a result, it plays a crucial role in supplying liquefied natural gas (LNG) across Asia and Australia. Therefore, this strategic footprint makes Santos a prime target for any firm looking to build a global gas giant status.
In a joint statement, both companies confirmed the proposal is “final and non-binding.” Previously, ADNOC made two lower, confidential bids. Consequently, this latest offer appears designed to finalize negotiations and move toward an agreement.
Moreover, it said, it would recommend the deal to shareholders if terms are agreed and no better offer appears. The company emphasized that it sees value in ADNOC’s plan to build global gas giant capabilities through the merger.
However, the deal still faces significant regulatory review. Authorities in Australia, Papua New Guinea, and the United States must all approve the transaction. In particular, Australia’s Foreign Investment Review Board will examine the offer closely. This is largely due to Santos’ ownership of key gas infrastructure on both coasts.
According to energy analyst Saul Kavonic, this will be a major test for Australian Treasurer Jim Chalmers. Since ADNOC is a foreign government-owned firm, the deal might require special conditions. For instance, one possible requirement could be the divestment of Santos’ domestic gas assets.
In conclusion, as talks continue, all eyes remain on how regulators and shareholders respond. The offer could significantly reshape the LNG landscape and help Abu Dhabi achieve its mission to build global gas giant dominance.
