Abu Dhabi’s state-owned energy giant, the Abu Dhabi National Oil Company (ADNOC), has submitted a takeover offer for Australian energy company Santos, valuing the business at US$18.7 billion. Both firms confirmed the development on Monday.
The proposed acquisition, led by ADNOC through its subsidiary XRG, marks a significant step in the UAE’s ambition to expand its global presence in gas and liquefied natural gas (LNG) markets. The offer of US$5.76 per share represents a 28% premium on Santos’ closing share price last Friday.
Santos, headquartered in Adelaide, operates a diversified energy portfolio across Australia, Papua New Guinea, East Timor and the United States. It is one of the leading LNG suppliers to Australia and broader Asian markets. The company’s board has stated its intention to unanimously recommend the deal to shareholders, provided terms are finalised and no superior proposal emerges.
Santos disclosed that this marks ADNOC’s third proposal, following two prior confidential bids made in March. Monday’s announcement referred to the offer as “final and non-binding”, subject to due diligence, regulatory approval and a binding agreement on terms.
Following the news, Santos’ shares surged nearly 12% on the Australian Securities Exchange during early afternoon trading.
The bidding consortium, alongside XRG, includes Abu Dhabi Development Holding Company and global investment firm Carlyle. In a statement, XRG said the acquisition would reinforce Santos’ legacy as a trusted energy provider while advancing regional and global energy security.
“The proposed transaction is aligned with XRG’s strategy and ambition to build a leading integrated global gas and LNG business,” the group stated.
ADNOC’s offer comes at a strategic juncture. Santos, which had previously engaged in merger discussions with Woodside Energy in an effort to become one of the world’s largest LNG exporters, ended those talks last year. The company has been the subject of takeover speculation for over two years.
Analysts at E&P Financial Group described the timing of the bid as “opportune”, pointing to rising energy prices and Santos’ completion of major capital projects. The firm also suggested that ADNOC’s interest in LNG may not be limited to Santos, citing media reports linking the Middle Eastern company to BP’s LNG and gas operations.
The consortium has committed to maintaining Santos’ corporate headquarters in Adelaide and to working with the current management team to accelerate growth, protect jobs and strengthen its operational base.
Additionally, XRG underscored its intention to invest in low-carbon technologies, including carbon capture and storage, as well as low-emissions fuels, in support of decarbonisation across Australia, Asia Pacific and beyond.
The deal remains subject to regulatory approval in Australia, Papua New Guinea and the United States.
-AFP
