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Australia’s Woodside Energy & Santos In $52B Merger Talks to Form Global Oil Powerhouse

 |  December 7, 2023

In a joint announcement on Thursday, Australia’s Woodside Energy and Santos revealed that they are engaged in preliminary discussions to create an A$80 billion ($52 billion) global oil and gas giant. The potential merger represents a significant move amid the ongoing trend of consolidation within the international energy sector.

If successful, this consolidation would mark the largest corporate deal in Australia in several years, breaking the subdued trend in buyout activity influenced by rising interest rates and financial market volatility.

Both Woodside and Santos, as major players in Australia’s oil and gas industry, are grappling with increasing pressures related to decarbonization and confronting challenges in their existing projects. Woodside, headquartered in Perth and the larger of the two entities, emphasized that the discussions with Santos are confidential and incomplete, highlighting the absence of certainty regarding the materialization of a deal.

Woodside stated to the Australian stock exchange, “Woodside continuously assesses a range of opportunities to create and deliver value for shareholders.”

The potential merger is expected to face rigorous scrutiny from Australia’s competition regulator, the Australian Competition and Consumer Commission (ACCC). The ACCC, having adopted a stricter stance on takeovers within concentrated sectors, acknowledged being aware of the public reports surrounding the potential transaction.

A spokesperson for the ACCC commented, “If the potential transaction progresses, the ACCC would consider if a public merger review into the impact on competition is required.” This underlines the regulatory vigilance in assessing the impact of such a significant merger on market dynamics.

As the energy landscape continues to evolve, the outcome of these discussions will undoubtedly have far-reaching implications for both companies involved and the broader Australian energy sector. Investors, industry experts, and regulatory authorities will be closely monitoring the progress of these talks as they unfold in the coming weeks.

Source: Reuters