XRG Consortium Offers to Buy Australia’s Santos

Santos Limited, which is listed on Australian Securities Exchange (ASX) said that it has received a “non-binding indicative proposal” from a consortium led by XRG, a subsidiary of Abu Dhabi National Oil Company (ADNOC) and including Abu Dhabi Development Holding Company (ADQ) and Carlyle (the XRG Consortium) to acquire the company for $18.7 billion.

The proposal is for the acquisition of all of the ordinary shares on issue in Santos (Santos Shares) for a cash offer price of $5.76 per share via a scheme of arrangement.

Santos is a global energy company with operations across Australia, Papua New Guinea (PNG), Timor-Leste and the US. It is the biggest supplier of natural gas in Australia, and owns pipeline gas and oil assets as well.

As at the close of trading on the ASX on 13 June 2025, the indicative proposal of $5.76 per Santos Share represented a 28% premium to the last closing price of $4.5; 30% premium to the one-week volume weighted average price (VWAP) of 4.41; 34% premium to the one-month VWAP of $4.28; 44% premium to the three -month VWAP of A$6.19[5]; and 39% premium to the six-month VWAP of 4.14.

The proposal is expressed as a “final non-binding indicative offer” and follows two confidential, non-binding and indicative proposals from the XRG Consortium to acquire 100% of Santos Shares on 21 March 2025 for $5.04 in cash per share and on 28 March 2025, for $5.42 in cash per share.

Terms and Conditions

The proposal is subject to the satisfactory completion of confirmatory due diligence by the XRG Consortium and the negotiation and execution of an agreed scheme implementation agreement (SIA) with Santos on customary terms and conditions.

The SIA would be conditional on, among other things, customary approval from seven regulators including the Foreign Investment Review Board, Australian Securities and Investments Commission, National Offshore Petroleum Titles Administrator, PNG Securities Commission, PNG Independent Consumer and Competition Commission and Committee on Foreign Investment in the US.

Due Diligence Access

After careful consideration of the proposal (including in consultation with its financial and legal advisers), the Santos Board has determined that it is in the best interests of company’s shareholders to provide the XRG Consortium with access to confidential information to conduct confirmatory due diligence and negotiate the terms and conditions of an SIA, subject to reaching agreement with the XRG Consortium on the terms on which access to due diligence will be provided.

The XRG Consortium has indicated that it requires Santos to enter into a Process and Exclusivity Deed including exclusivity restrictions before it progresses to undertaking confirmatory due diligence and negotiating the terms of the SIA.

Santos intends to negotiate the terms of the Process and Exclusivity Deed and an associated Confidentiality Deed with the XRG Consortium.

Next Steps

The Santos Board has confirmed that subject to reaching agreement on acceptable terms of a binding SIA, it intends to unanimously recommend that Santos shareholders vote in favour of the transaction, in the absence of a superior proposal and subject to an independent expert concluding, and continuing to conclude, that the Potential Transaction is fair and reasonable and in the best interests of Santos Shareholders.

Goldman Sachs and JB North & Co are acting as financial advisers to Santos; Rothschild & Co is acting as independent board adviser. Herbert Smith Freehills Kramer is acting as legal adviser to Santos.