Adnoc Makes $19 Billion Takeover Bid for Australia’s Santos

SEATTLE (Oil Monster): A unit of Abu Dhabi National Oil Co. has made an all-cash bid for Santos Ltd. that values the Australian oil and gas producer at $18.7 billion.

A consortium led by Adnoc’s investment arm XRG PJSC that also includes Abu Dhabi Development Holding Co. and Carlyle Group Inc., offered $5.76 (A$8.89) for each Santos share, the company said Monday. That is a 28% premium to the closing price on Friday.

Santos' stock has climbed in recent months on speculation that Middle Eastern energy producers, including Adnoc and Saudi Aramc,o were considering bids.

The deal will help to bolster Adnoc’s effort to become a major supplier of liquefied natural gas, one of the fastest-growing fossil fuel markets. Santos has LNG assets in Australia and Papua New Guinea.

Adnoc, an active dealmaker in recent months, recently launched XRG, which is now on the hunt for gas and chemicals deals as it targets an $80 billion enterprise value.

“The proposed transaction is aligned with XRG’s strategy and ambition to build a leading integrated global gas and LNG business,” the Adnoc unit said in a statement. The company plans to “invest in Santos’ growth and further development of its gas and LNG-focused business,” it said.

Santos has long been an attractive target for rivals. In 2018, the Adelaide-based company rejected multiple offers from US-based Harbour Energy Ltd., while talks with Woodside Energy Group Ltd. broke down last year. Some investors have urged Santos to split its coveted LNG assets from oil operations in Alaska and its domestic gas business in Australia to cash in on higher valuations.

Courtesy: www.cnbctv18.com