The ADNOC-led consortium includes ADQ and Carlyle.
Australia’s second-largest independent gas producer, Santos, has announced a delay in the $18.7bn takeover bid by an Abu Dhabi National Oil Company (ADNOC)-led consortium, extending the exclusive due diligence period by at least one month past the initial deadline, as reported by Reuters.
The consortium, which includes Abu Dhabi Development Holding Company (ADQ) and Carlyle, is said to have informed Santos that additional time is required to secure all necessary approvals for formalising the bid.
The consortium’s proposed offer of A$8.89 per share has been under scrutiny, with Santos shares trading below the proposed value since the announcement on 16 June.
Despite the delay, ADNOC’s international investment arm, XRG, stated that the consortium will continue due diligence and negotiations.
The enterprise value of Santos, including net debt, would reach A$36.4bn, potentially marking the largest all-cash corporate buyout in Australian history, as per FactSet data.
Rystad Energy Gas and LNG Research vice-president Kaushal Ramesh was quoted by the news agency as saying: “This was never going to be an easy transaction to pull off with the confluence of domestic energy security and national interest considerations as well as the multitude of hard to please stakeholders involved.”
Regulatory approvals from Australia, Papua New Guinea and the US are essential for the deal to proceed, given Santos’ asset distribution across these jurisdictions.
Jamie Hannah, deputy investment director at Santos shareholder Van Eck, said: “I don’t think (the delay) is going to change the overall risk to the takeover, and that is still the Foreign Investment Review Board. I think that is probably the biggest risk to the whole takeover.”
Australia’s gas market is under political scrutiny, with warnings of a potential gas shortfall in the eastern states by 2028.
Santos’ long-delayed Narrabri gas project in New South Wales is seen as a solution to this impending issue.
In the previous year, Woodside and Santos were engaged in $52bn merger talks, which ultimately failed. Woodside chief executive Meg O’Neill stated Woodside’s lack of interest in a rival bid.
If the current bid is successful, the consortium would receive control of two Australian liquefied natural gas (LNG) operations and assets in Papua New Guinea, including the prized PNG LNG and Papua LNG projects.
The two Australian LNG operations are Gladstone LNG and Darwin LNG.
Santos is also progressing with its Alaskan oil project, Pikka, which is set to commence production in mid-2026.
In the meantime, Santos has postponed its interim earnings report to 25 August from the initially planned 20 August.
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