ADELAIDE: A consortium led by Abu Dhabi’s XRG P.J.S.C. has withdrawn its non-binding $5.6 billion proposal to acquire Australian energy firm Santos Ltd (ASX: STO), ending months of negotiations over a potential cash scheme of arrangement.
The consortium, which included Abu Dhabi Development Holding Company and private equity firm Carlyle, cited regulatory risks and delays in finalizing a Scheme Implementation Agreement (SIA) as key reasons for its decision. Santos had indicated readiness to proceed with the deal if binding terms were agreed by Sept. 19.
Despite completing due diligence without concerns, the XRG Consortium declined to accept terms that Santos said were necessary to protect shareholder value, including commitments on regulatory approvals and domestic gas supply.
Santos Chair Keith Spence reaffirmed the company’s strategic direction, highlighting progress on its Barossa and Pikka Phase 1 projects, which are expected to boost production by 30% by 2027. “Our disciplined low-cost model continues to deliver strong cash flows and shareholder returns,” Spence said.
The withdrawal marks a setback in Santos’ M&A prospects but underscores its confidence in organic growth and infrastructure reinvestment.