Santos board indicatively backs proposed $30b takeover bid from Abu Dhabi oil giant ADNOC
The board of Santos (ASX: STO) has indicated its willingness to back a $30 billion takeover bid by global oil and gas giant the Abu Dhabi National Oil Company (ADNOC).
The non-binding bid is led by the XRG Consortium – the international investment arm of the Abu Dhabi business – that includes the Abu Dhabi Development Holding Co and global private equity giant Carlyle Group.
Santos intends to unanimously recommend its shareholders vote in favour of the takeover offer that ADNOC has indicatively priced at approximately $8.89 (US$5.76) per share, a 28% premium to the last closing price of $6.96.
Major global oil company
ADNOC – the state-owned oil company of Abu Dhabi in the United Arab Emirates and the world’s 12th-largest oil company by production – has been on a spending spree recently with billions in field development investments, while at the same time keeping an eye on the potential for new asset acquisitions.
The final non-binding indicative offer follows two previous confidential non-binding proposals from the XRG Consortium to acquire 100% of Santos shares—on 21 March 2025 for $8.00 per share, and again on 28 March 2025 for $8.60 per share.
The consortium has reportedly stated it plans to maintain Santos’ headquarters in Adelaide, keeping the company’s operational footprint in Australia and other international operating hubs.
Multiple approvals
Implementation of the scheme would be conditional on (among other things) the customary approval from the Foreign Investment Review Board and Australian Securities and Investments Commission.
The National Offshore Petroleum Titles Administrator, PNG Securities Commission, PNG Independent Consumer and Competition Commission and Committee on Foreign Investment in the United States would also need to green-light the transaction.
Fitch Ratings announced last week that Santos’ strong gas market position in Australia and PNG, along with its business profile, had helped re-affirm its “BBB” rating with a “stable outlook”.
Santos now intends to arrange terms for the requisite exclusivity and confidentiality deeds before the XRG Consortium progresses to undertaking confirmatory due diligence and the two parties negotiate the final terms of the deal.