Abu Dhabi’s ADNOC-backed investment arm XRG withdrew its $18.7 billion indicative bid for Australian-listed LNG firm Santos, ending an exclusivity period for a takeover the target’s board had said it would support if binding terms were reached.
XRG said the consortium comprising Abu Dhabi sovereign fund ADQ and Carlyle Group “will not proceed with a binding offer,” capping a months-long process. The withdrawal came after Santos twice extended due diligence.
Price terms had been clear since June: $5.76 per share, a 28% premium to the prior close, implying an enterprise value of A$36.4 billion, the largest all-cash corporate buyout in Australian history if completed.
The market never fully priced completion risk. Santos recently closed at A$7.65, consistently below the indicative A$8.89 offer since June.
Santos disclosed that two earlier, lower non-public March approaches were rejected before the higher June proposal, which the board had intended to recommend if a binding scheme agreement were negotiated.
As for why the deal collapsed, sources cited a “combination of factors” tied to commercial terms. Reporting points to disputes over who would bear capital-gains tax, concerns about timeliness of disclosures (including a reported methane-leak issue), and broader domestic pushback during a period of gas-supply sensitivity.
XRG has characterized the decision as commercial, not political.
Context for XRG’s firepower changed this month. ADNOC transferred stakes in several listed subsidiaries to XRG, strengthening its balance-sheet capacity for global deals.
XRG says it remains a “disciplined” acquirer and will pursue other LNG and energy investments, while Santos resumes its standalone plan after yet another failed approach.
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