Australian energy company Santos has announced its support for an $18.7 billion acquisition offer from a consortium headed by the United Arab Emirates’ state-owned energy firm Adnoc. The proposal values Santos shares at a 28% premium over their last closing price and marks a major move in Adnoc’s international gas expansion strategy.
The offer is being made through Adnoc’s investment vehicle, XRG, in partnership with the Abu Dhabi Development Company and global private equity firm Carlyle. The consortium is targeting Santos’ extensive liquefied natural gas (LNG) portfolio, which includes ownership stakes in the Darwin LNG and Gladstone LNG facilities in Australia, as well as a majority interest in the PNG LNG project in Papua New Guinea. The latter is widely considered one of the world’s most cost-efficient LNG ventures.
Santos also recently secured approval for a new $2.3 billion coal seam gas development intended to supply the Australian domestic market.
In a formal statement, the company’s board said it would support the proposed transaction, provided a binding agreement can be reached. “The Santos Board confirms that, subject to reaching agreement on acceptable terms of a binding scheme implementation agreement, it intends to unanimously recommend that Santos shareholders vote in favour of the potential transaction, in the absence of a superior proposal,” the statement read.
Despite backing from Santos leadership, the acquisition faces significant regulatory scrutiny. Saul Kavonic, senior energy analyst at MST Marquee, noted that because Santos controls critical infrastructure in Australia, foreign ownership could be a sticking point for government agencies. Regulatory approval would be required from six different bodies across Australia, Papua New Guinea, and the United States, and analysts warn that consent from Papua New Guinea in particular is far from guaranteed.
The outcome of the bid remains uncertain, as the proposed takeover navigates both political sensitivities and complex international regulatory landscapes.
