Australia’s Santos has pushed back the finalisation of its $18.7 billion takeover bid by an Abu Dhabi National Oil Company (ADNOC)-led consortium. At least another month needed as regulatory approvals remain pending. The deal was expected to reach a scheme agreement by August 22.
The delay weighed on investor confidence, sending Santos shares down 3.5% to A$7.68, a five-week low. The consortium’s offer of A$8.89 per share. If successful, would mark Australia’s largest all-cash corporate acquisition, with an enterprise value of A$36.4 billion including debt.
Approvals Pending
The bidding group—comprising ADNOC’s international investment arm XRG, Abu Dhabi Development Holding Company (ADQ), and private equity firm Carlyle. They have sought an additional four weeks to complete due diligence. The deal requires clearance from regulators in Australia, Papua New Guinea, and the United States, as Santos operates significant assets in all three regions.
Analysts highlight the Foreign Investment Review Board (FIRB) as the biggest potential roadblock. The Australian government will scrutinise whether transferring critical energy assets to Middle Eastern investors aligns with national interests. Kaushal Ramesh of Rystad Energy said, ‘This was never going to be an easy transaction,’ pointing to energy security concerns and competing stakeholder priorities.
Energy Market Pressures
Gas supply remains a politically sensitive issue in Australia. Regulators warn eastern states could face a supply shortfall by 2028 unless new projects proceed. Santos has maintained its Narrabri gas project in New South Wales could help ease the looming gap.
If approved, the acquisition would give ADNOC and partners access to Santos’ LNG stakes. Additonally, Gladstone LNG, Darwin LNG, PNG LNG, and the undeveloped Papua LNG. Assets in Papua New Guinea are considered Santos’ most valuable. The consortium would also gain control of the company’s Pikka oil project in Alaska, set to start production in 2026.
Outlook
While the delay injects uncertainty, analysts say the main challenge lies in regulatory approval rather than timing. Santos has also postponed its interim earnings release to August 25.
The Santos–ADNOC deal remains one of the most closely watched transactions in Australia’s energy sector. The outcome set to influence the future of LNG in the region.
