The investment arm of Abu Dhabi’s state-owned oil company has made a nearly $30 billion takeover bid for Santos, South Australia’s largest company.
The Santos takeover is subject to a range of Commonwealth government approvals and further due diligence by the Abu Dhabi consortium.
The South Australian government has threatened to intervene if the takeover bid is “not in the interests of South Australians”, but only the Commonwealth government can determine that.
The South Australian government’s concept of ‘local interest’ is not compelling but the inclusion of a US private equity firm in the takeover may raise eyebrows.
The agreement is also subject to approval from the Foreign Investment Review Board, Australian Securities and Investments Commission and the National Offshore Petroleum Titles Administrators, as well as other authorities in Papua New Guinea and the US.
Santos told the stock exchange on Monday that it had received a takeover offer from a consortium led by XRG, the international investment arm of the state-owned Abu Dhabi National Oil Company.
The offer values the oil and gas company at about $28.8 billion.
The Santos board has indicated it intends to unanimously recommend shareholders vote in favour of the potential transaction in the absence of a better offer and subject to reaching a final agreement.
Santos, founded in 1954 as South Australia and Northern Territory Oil Search, is South Australia’s largest company and a top-20 company on the ASX.
It has oil and gas assets in the Cooper Basin in far north-eastern South Australia, Gladstone in Queensland, and across Western Australia and Papua New Guinea.
Santos has a range of oil and gas assets across the Asia-Pacific region.
XRG said it intended to maintain Santos’s headquarters in Adelaide and its “brand, and operational footprint in Australia and key international operational hubs”.