ADNOC's XRG-led consortium drops $19 billion takeover bid for Australia-based Santos

Dubai: An XRG-led consortium, backed by Abu Dhabi National Oil Company (ADNOC), has withdrawn its indicative offer for Australian energy producer Santos Ltd., ending months of negotiations over a potential $18.7 billion deal.

The consortium decided not to proceed with a binding offer following a comprehensive evaluation of commercial factors and the terms of the Scheme Implementation Agreement required by the Santos board. While the consortium continues to hold a positive view of Santos’ business, it said a combination of factors collectively influenced its decision.

The offer, made in June, was an all-cash proposal priced at $5.761 (A$8.89) per share. Santos shares recently closed at A$7.65, below the consortium’s indicative offer price, highlighting a gap between market valuation and the proposed acquisition terms.

Santos, Australia’s second-largest fossil-fuel producer, had twice extended an exclusivity period to allow the consortium additional time to complete due diligence and obtain necessary regulatory approvals. Its board had recommended the ADNOC-backed offer, but opposition from trade groups, including Offshore Alliance representing major labor unions, urged the government to block the sale and keep Santos under Australian ownership.

Third unsuccessful attempt

This marks the third unsuccessful attempt to acquire Santos, reflecting the challenges foreign investors face when trying to buy Australian energy assets. The withdrawal also slows ADNOC’s overseas expansion ambitions, though the company remains active in pursuing international energy deals.

The consortium emphasized that it remains a disciplined, long-term investor. The process reinforced its confidence in Australia’s energy and investment environment and demonstrated the potential for strategic international investment in the sector.

XRG, wholly owned by ADNOC, invests across gas, LNG, chemicals, and scalable energy solutions. The company said it continues to pursue a “rich pipeline” of opportunities in global energy markets, including projects that support regional energy security and the transition to cleaner fuels.

While the withdrawal is a setback for Santos in its search for strategic partners, it highlights ADNOC’s growing influence in international energy dealmaking through its investment arm. The consortium expressed appreciation to Santos’ management and all stakeholders for their cooperation throughout the process.

The move underscores the complexities foreign investors face when navigating regulatory, market, and stakeholder considerations in Australia’s energy sector, even as ADNOC seeks to expand its international footprint and invest in high-demand energy markets worldwide.

- With inputs from Agencies