Oil Search and Santos to close a buyout deal worth A$8.4 billion

Date: 2021-08-03   Author: Pankaj Singh  Category: #news

Oil Search and Santos to close a buyout deal worth A$8.4 billion

Oil Search Ltd. has reportedly revealed its intention to recommend an updated buyout offer worth A$8.4 billion (USD 6.2 billion) from Santos Ltd. This deal will result in the creation of a top-20 global oil and gas company.

The merged entity would own oil and gas sites in Papua New Guinea (PNG), Alaska, and Australia. On top of that, the company will own a combined stake of 42.5% in the PNG LNG project. This overtakes Exxon Mobil Corp’s 33.2% stake in the project.

With this acquisition, Santos will widen its presence as the industry struggles to obtain capital from investors and financiers growingly aware of climate change and fossil fuels. Santos is the second largest independent producer of gas in Australia. It recently increased its offer by 6.5%, taking it to 0.6275 new shares from 0.589 for each share of Oil Search. This offer was rejected by Oil Search in June.

The deal got Oil Search a A$4.05 per share value, which is a 6% premium over the company’s Friday closure based on Santo’s Friday closing price. The Papua New Guinea-based oil and gas producer’s shares increased by around 8% on Monday. However, it consistently traded just below the offer value, signifying that the investors support the deal. Santos’ shares rose by around 3.6%.

Matthew Haupt, Portfolio Manager at Wilson Asset Management, share owners in Santos and Oil Search, apparently commented on the company’s support for the transaction and considers the merger a better business proposition than individual enterprises.

The shareholders of Oil Search will own close to 38.5% of the merged group while the shareholders of Santos will account for up to 61.5%. The original offer made by the company in June would have provided Oil Search shareholders with a 37% stake in the alliance.

Kevin Gallagher, the Managing Director of Santos, supposedly that that the association will create an unmatched regional leader with a distinctively diversified portfolio of low-cost, long-life oil and gas assets.

Source credits:

https://www.reuters.com/business/energy/australias-santos-hikes-bid-oil-search-690-bln-2021-08-01/



About Author


Pankaj Singh linkdin-boxtwitter

Pankaj Singh

Pankaj Singh Develops content for Algosonline, Market Size Forecasters, and a couple of other platforms. A Post Graduate in Management by qualification, he worked as an underwriter in the UK insurance domain before deciding to switch his field of profession. With exp...

Read More

Post Recommendents

RELX enters KSA distribution partnership with SAF Trading Agencies

Author: Pankaj Singh

RELX International has reportedly partnered with SAF Trading Agencies for the exclusive distribution of RELX e-liquid nicotine products and e-cigarette devices across the Kingdom of Saudi Arabia.

Grapeseed Oil Market COVID-19 Impact Analysis, Sizing and Growth Analysis, Forecast to 2026

Author: Rahul Varpe

According to DEC Research Inc. the Grapeseed Oil market is projected to grow from USD 410 million in 2018 to USD 560 Million in 2026 and exhibiting a CAGR of 4.6% during the forecast period.

The Grapeseed Oil Research Report is a factual...


Proanthocyanidins Market COVID-19 Impact Analysis, Trends, Challenges & Growth Opportunities to 2026

Author: Rahul Varpe

According to DEC Research Inc. the Proanthocyanidins market is projected to grow from USD 7.65 billion in 2018 to USD 12 Billion in 2026 and exhibiting a CAGR of 6.1% during the forecast period.

The Proanthocyanidins Research Report is a...