UAE's ADNOC Close to $19 Billion Gas Deal

               UAE Gas Deal for $19 Billion                                                                                                         

 UAE's ADNOC Close to $19 Billion Gas Deal

UAE's ADNOC is close to a $19 billion gas acquisition, a move that will support its strategy to grow its global gas business both domestically and internationally.

Santos, Australia's second-largest gas producer, announced on Monday, June 16, 2025, according to a statement, its intention to support an $18.7 billion cash takeover offer from a consortium led by the Abu Dhabi National Oil Company.

ADNOC, through its investment arm XRG, in partnership with holding company ADQ and private equity firm Carlyle Group, offered $5.76 (A$8.89) per share for Santos, representing a 28% premium to the Australian company's closing price on Friday.

The deal gives Santos an enterprise value of A$36.4 billion (US$23.68 billion). This makes it the largest all-cash acquisition of a company in Australian history. Data shows that if the ADNOC deal is completed, the Santos acquisition will be the third-largest ever in Australia.

Megaprojects

With Santos joining, the XRG-led consortium will control two LNG projects in Australia – the Gladstone LNG terminal on the east coast and the Darwin LNG terminal in the north – as well as stakes in LNG terminals in Papua New Guinea. Santos's projects in Papua New Guinea are among its most valuable assets.

The company is also developing the Pikka oil project in Alaska, which is scheduled to begin production in mid-2026. ADNOC subsidiary XRG revealed in June that it aims to build a gas and LNG business with a capacity of 20 million to 25 million metric tons per year by 2035. Santos sold 5.08 million tons of LNG last year, more than 60% of which came from Papua New Guinea.

The acquisition offer follows two previous bids submitted by the consortium in March, at $5.04 and $5.42 per share, which were not made public. XRG announced that it is conducting due diligence negotiations with Santos exclusively before formalizing the offer, which will require at least 75% support from Santos investors.

The proposed deal is in line with ADNOC's strategy and ambition to build a leading, integrated global gas and LNG business. ADNOC established XRG in November and last month acquired a stake in an offshore gas field in Turkmenistan. ADNOC has also concluded several international deals for its assets, including gas and LNG interests in Mozambique.

Santos confirmed that the deal requires approval from the Australian Foreign Investment Review Board (FIRB), the Australian Securities and Investments Commission (ASIC), the National Offshore Oil Securities Authority, the Papua New Guinea Securities Commission, the PNG Independent Consumer and Competition Commission, and the Committee on Foreign Investment in the United States (CIFIUS).

The Emirati company plans to keep Santos' headquarters in South Australia, a move aimed at appeasing some regulators.

Santos shares

Santos shares rose 15% in early trading on Monday to A$7.86 ($5.11), well below the offer price for the deal, before retreating to A$7.81 mid-session. "For ADNOC, this is in line with its ambitious growth plans," said Kushal Ramesh, vice president of gas and LNG research at Rystad Energy.

Analysts noted that Santos' shares were trading below the offer price due to the risk that regulators in both Australia and Papua New Guinea would not approve the deal. The takeover bid came as oil prices hit multi-week highs as Israel and Iran exchanged airstrikes, raising concerns that Middle East oil exports could be widely disrupted.

The ADNOC deal follows the cancellation last year of talks between Santos and its larger Australian rival, Woodside, to create a potential A$80 billion oil and gas giant. Santos withdrew, saying it would seek other ways to boost its value. In February, Santos announced that its annual underlying profit would fall by about 16% in 2024 and cut its dividend by 41%.

Santos was a takeover target after rejecting a $10.8 billion offer from private equity-backed Harbor Energy in 2018. Many experts believe a competing bid is highly unlikely, as only ADNOC would be willing to pay such a premium to achieve its global LNG ambitions.