ADNOC-led group drops $18.7bn Santos bid
Shares sink 13% as failed takeover sparks investor unease
Australian gas producer Santos saw its shares plunge up to 13.6 % after the XRG consortium, led by Abu Dhabi’s ADNOC and backed by AD Q and Carlyle, withdrew its $18.7 billion all‑cash offer. The consortium had indicated it could close a deal at A$5.626 per share, a slight reduction from the June proposal of A$5.76, which had been adjusted for a recent dividend.
The aborted transaction would have valued Santos at roughly A$36.4 billion including debt, making it the largest cash‑only takeover in Australian corporate history. Its collapse marks the third failed bid for the company in seven years, following a rejected Harbour Energy offer in 2018 and a stalled merger discussion with Woodside Energy.
In early trading, Santos’ stock fell to A$6.61, its lowest level since early June, while the broader S&P/ASX 200 slipped 0.9 %. Investment banks quickly revised their outlooks; Jarden downgraded the stock from “overweight” to “underweight” and cut its 12‑month price target from A$8.40 to A$7.05, citing valuation difficulties and the regulatory‑political hurdles foreign buyers face in Australia’s strategic energy sector.
The consortium’s withdrawal statement cited a “combination of factors” that, taken together, prevented agreement on commercial terms. Analysts note that the deal’s demise underscores the growing complexity of financing, competition and political scrutiny in the global gas market, even for well‑capitalised suitors like ADNADOC, which is seeking to broaden its portfolio beyond the Middle East.
Santos reiterated its commitment to advancing LNG projects in Australia and Papua New Guinea and to delivering shareholder value as an independent operator. Nonetheless, the sharp price drop reflects investor unease about the company’s strategic direction after the loss of a deal that would have reshaped its trajectory.
The failed takeover forces both Santos and its potential acquirers to reassess options amid heightened market volatility, strong demand for natural gas, and an increasingly intricate regulatory environment.
