SYDNEY — Santos Ltd. has confirmed that a consortium led by Abu Dhabi National Oil Company (Adnoc), through its XRG unit, has officially withdrawn its $18.7 billion takeover bid. The decision marks the collapse of what would have been one of the year’s largest energy sector deals, underscoring strategic and valuation disagreements between the two sides.
The consortium informed Santos of its intention to walk away from the non-binding offer on Wednesday evening. According to XRG, the terms demanded by Santos’s board, as well as the complexities and time frame associated with regulatory approvals and due diligence, contributed to its decision not to proceed.
Santos had previously indicated that it would recommend shareholders accept a bid priced at approximately US$5.626 per share. However, despite early optimism, negotiations failed to progress to a formal proposal stage. Insiders suggest the deal faced mounting headwinds over governance structure, integration plans, and market uncertainties, especially in a volatile global energy landscape.
The collapse of the bid immediately impacted investor sentiment. Santos shares fell sharply following the announcement, reflecting investor disappointment and doubts about alternative paths for growth. The company had been exploring strategic options, including potential mergers or partnerships, to bolster its position in the liquefied natural gas (LNG) and carbon capture sectors.
Industry analysts had viewed the potential acquisition as a significant step for Adnoc in expanding its global presence, particularly in Asia-Pacific’s LNG market, where Santos holds key assets. The deal would also have aligned with broader efforts by Middle Eastern energy giants to diversify and decarbonize through international investments.
Santos, one of Australia’s largest independent oil and gas producers, stated it remains confident in its long-term growth strategy. The company continues to focus on its major projects, including the Barossa gas field development and its Moomba carbon capture and storage (CCS) facility — both seen as critical to its future earnings and environmental commitments.
While the XRG bid is now off the table, analysts do not rule out future interest in Santos, either from Adnoc or other global players, especially as consolidation in the energy sector continues.
Santos said it would provide further updates as necessary but emphasized its commitment to delivering shareholder value through operational performance and disciplined capital management.
