The board of Santos, listed as STO on the ASX, has expressed its support for a $30 billion takeover bid from the Abu Dhabi National Oil Company (ADNOC), a prominent global oil and gas entity. This non-binding proposal is spearheaded by the XRG Consortium, which is the international investment arm of ADNOC, and includes the Abu Dhabi Development Holding Co and global private equity firm Carlyle Group. Santos plans to recommend that its shareholders vote in favor of the bid, which ADNOC has tentatively set at about $8.89 per share (US$5.76), representing a 28% premium over Santos’ last closing price of $6.96.

ADNOC, which is state-owned and ranks as the world’s 12th-largest oil company by production, has recently been actively investing billions in field development. The company is also looking to acquire new assets. The latest bid follows two earlier non-binding proposals from the XRG Consortium, which aimed to buy 100% of Santos shares at $8.00 per share on March 21, 2025, and $8.60 per share on March 28, 2025.

The consortium has indicated its intention to keep Santos’ headquarters in Adelaide, ensuring that the company maintains its operational presence in Australia and other global hubs. The execution of this takeover would require customary approvals from various regulatory bodies, including the Foreign Investment Review Board and the Australian Securities and Investments Commission. Additionally, clearances from the National Offshore Petroleum Titles Administrator, PNG Securities Commission, PNG Independent Consumer and Competition Commission, and the Committee on Foreign Investment in the United States are also necessary.

Fitch Ratings stated last week that Santos’ strong position in the gas market within Australia and Papua New Guinea has supported its “BBB” rating with a “stable outlook.” Santos is now focused on finalizing terms for the necessary exclusivity and confidentiality agreements before the XRG Consortium proceeds with confirmatory due diligence and negotiates the definitive terms of the acquisition.