Abu Dhabi  - In a major move to expand its global footprint in natural gas, the Abu Dhabi National Oil Company (ADNOC) has launched a US$18.7 billion takeover bid for Australian energy heavyweight Santos.

Santos, which is based in Adelaide and operates across Australia, Papua New Guinea, East Timor, and the United States, confirmed on Monday that its board is prepared to back the offer—provided a deal can be finalised. The company is a significant player in the liquefied natural gas (LNG) market in the Asia-Pacific region.

The proposed offer, led by ADNOC’s subsidiary XRG, values Santos at US$5.76 per share—representing a 28% premium on the company’s last closing price. If approved, this would be ADNOC’s largest overseas acquisition bid to date.

Santos stated that the current offer was the third approach from the Abu Dhabi firm, following two earlier confidential bids in March. Unlike the earlier proposals, this latest bid is labelled as ADNOC’s “final, non-binding offer.”

The bid is being made by a consortium led by XRG and includes the Abu Dhabi Development Holding Company and U.S.-based private equity firm Carlyle. In a joint statement, the group said it intends to transform Santos into a global LNG powerhouse while preserving its Australian roots.

“The transaction aligns with our strategy to build a world-leading integrated gas business,” the consortium said. “We’re committed to strengthening energy security both in the region and internationally.”

ADNOC pledged to keep Santos’ headquarters in Adelaide and work alongside existing management to support growth and protect local jobs. The group also emphasised plans to ramp up investment in carbon capture, low-emissions fuels, and decarbonisation technologies.

Despite the warm reception from Santos’ board, the deal still faces significant regulatory hurdles. Authorities in Australia, Papua New Guinea, and the United States will need to approve the acquisition.

Energy analyst Saul Kavonic from MST Marquee warned that scrutiny in Australia will be intense. “This will be a key test for the Australian government, especially given Santos’ ownership of vital gas infrastructure on both coasts,” he said.

Australia’s Treasurer Jim Chalmers is expected to play a decisive role, particularly given the bidder’s status as a foreign state-owned entity. Kavonic suggested that Canberra may require certain domestic assets to be spun off as a condition for approval.

Santos shares jumped over 11% on the Australian Securities Exchange following the announcement, signaling investor optimism.

According to a report by E&P Financial Group, the takeover interest comes at a strategically favourable time. The firm noted that Santos had long been seen as a potential acquisition target and that current market conditions—with the outlook for higher energy prices—make this a timely move.

This comes months after merger talks between Santos and fellow Australian firm Woodside Energy collapsed. That deal would have created one of the world’s largest LNG exporters.

With this latest development, ADNOC is positioning itself for a stronger presence in the Asia-Pacific, and all eyes are now on Australia’s regulatory bodies to determine whether the takeover goes ahead.


By WafricNews Desk.