Australian oil and gas producer Santos Ltd. announced on 16 June that it has received a nonbinding takeover bid from the XRG Consortium, a group led by the Abu Dhabi National Oil Company (ADNOC), Abu Dhabi Development Holding Company, and the private equity firm Carlyle Group.
The offer of $5.76 per share represents an almost 28% premium over Santos’ last closing price prior to the announcement, valuing the proposed deal at about $18.7 billion. This marks the third proposal made to Australia’s second-largest oil and gas company by the consortium this year, reflecting a 14% and 6% increase over the two earlier, confidential offers made in March.
Santos said its board intends to unanimously support the acquisition and will recommend shareholders vote in favor, describing the offer as “fair and reasonable.”
The proposed acquisition would hand ADNOC a major presence in the Asia-Pacific gas market given that Santos holds significant stakes in liquefied natural gas (LNG) and other gas-focused projects across Australia, Papua New Guinea, and Timor-Leste. Santos reported a net annual production output of 87.1 million BOE in 2024.
XRG, based in Abu Dhabi, was established in 2024 with a mandate to build a global energy portfolio valued at up to $80 billion, spanning chemicals, natural gas, and other energy sectors.
In its own statement, XRG noted that the proposal is not a “firm intention” to proceed with a transaction and remains subject to due diligence and regulatory approvals.
If the deal proceeds, the consortium said it plans to maintain Santos’ headquarters in Adelaide and preserve its brand name. It also emphasized plans to grow Santos’ gas and LNG operations in Australia and the broader Asia-Pacific region.
Santos has been the subject of merger discussions for over a year, including a proposed but ultimately failed combination with Australia’s largest oil and gas producer, Woodside Energy, to form what would have become an $52 billion energy company.
Following the takeover bid, South Australian Premier Peter Malinauskas reaffirmed the state government’s regulatory role in approving changes to license holders and emphasized that preserving local employment and maintaining Santos’ headquarters in Adelaide are central to the state’s position.
“I spoke today with XRG who briefed me about their plans, and we welcome the opportunity to continue this positive engagement. Any judgments we make regarding this process will be made in the state’s best interests,” Malinauskas said in a statement.
