Santos Focused on Future Growth After Abu Dhabi Consortium Withdraws $31b Takeover Bid
For the second time in 18 months, a potential suitor has walked away from a proposed takeover of leading Australian oil and gas company Santos (ASX: STO).
XRG – the foreign investment arm of the Abu Dhabi National Oil Company (ADNOC) and its bidding partners – announced overnight the withdrawl of their $31 billion offer to acquire Santos after months of negotiations and discussions with the company, investors and a range of government bodies.
Local major Woodside Energy (ASX: WDS) had previously called off its own merger talks with Santos in February 2024.
No Due Diligence Issues
Santos was quick to point out that the XRG group had not found anything in due diligence that led it to withdraw its indicative takeover proposal, and in fact maintained a positive view of the Santos business and management team.
However, the Santos board had expressed its concern about delays in agreeing on certain details needed to finalise the deal.
“The XRG consortium would not agree to acceptable terms which protected the value of the potential transaction for Santos shareholders, having regard to the likely extended timeframe to completion and the regulatory risk associated with the transaction,” chair Keith Spence said.
The company further explained that the XRG consortium would not agree to an appropriate allocation of risk between itself and Santos shareholders, including its obligation to secure regulatory approvals and a reasonable commitment to the development and supply of domestic gas.
Strong Business Case
Mr Spence said Santos continues to successfully execute its clear strategy to deliver superior shareholder value, with the company’s base business generating strong, stable cash flows underpinned by its disciplined low-cost operating model.
“With production set to rise as Barossa and Pikka Phase 1 come online, and unit production cost expected to trend lower over time, our strategy is clear: generate cash, reward shareholders, reinvest to backfill and sustain our infrastructure, and build and grow our production while continuing to operate safely and reliably,” Mr Spence said.
“Santos has a clear strategy, strong leadership and high-quality growth opportunities across our global portfolio—the board is confident these strengths will deliver long-term value for shareholders,” he added.