Plug pulled on $86 billion Santos-Woodside merger

Perth-based Woodside has today ruled out a merger with South Australia’s top company to create an $86 billion energy giant – a move welcomed by the Malinauskas Government.

Feb 07, 2024, updated Feb 07, 2024

The proposed merger of Western Australia’s Woodside with South Australian oil and gas giant Santos will no longer proceed, with Woodside today announcing discussions on the deal had ceased.

Had it gone ahead, the union would have created an $86.5 billion gas giant amid rapid consolidation in the energy sector following the $9.6 billion buyout of Adelaide’s OZ Minerals by BHP.

In a short statement, Woodside CEO Meg O’Neill today said: “We continue to be disciplined in our approach to mergers and acquisitions and capital management to create and deliver value for shareholders”.

“While the discussions with Santos did not result in a transaction, Woodside considers that the global LNG sector provides significant potential for value creation.

“Woodside’s world-class global portfolio, growth pipeline and strong balance sheet underpin our attractive investment proposition for Australian and global investors.”

In a statement a short time ago, Santos confirmed discussions between the parties had ended.

“Following an initial exchange of information, sufficient combination benefits were not identified to support a merger that would be in the best interests of Santos shareholders,” it said.

“Santos has a clear strategy to deliver long-term shareholder value. We have a strong balance sheet and continue to review options to unlock value for shareholders.”

When it was announced in December last year that merger talks had kicked off between the two companies, the Malinauskas Government and Business SA both voiced concerns over the proposed deal.

Energy and Mining Minister Tom Koutsantonis said at the time that the state government would “do everything it can to ensure South Australian jobs are protected and that companies headquartered in South Australia remain in South Australia”.

Koutsantonis also threatened to use his regulatory powers to “protect South Australian jobs” if the merger went ahead.

Today, the Minister tweeted a screenshot of Woodside’s announcement, saying: “Good”.


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Koutsantonis told InDaily the news was a “good outcome for South Australia”.

“Santos is synonymous with South Australia – the first two letters of its name stand for South Australia,” he said.

“It is out largest company and a good corporate citizen, and I am very pleased that Santos will remain in SA.”

Business SA CEO Andrew Kay also welcomed the decision.

Maintaining large businesses’ headquarters in South Australia is integral to our economic growth,” he said.

Santos plays a vital role as a major employer in South Australia, contributing to our state’s ability to attract top talent. Additionally, their commitment to community initiatives underscores their significant impact on our state.”

The news follows an announcement from Santos in January that it had agreed to exchange information with Woodside as part of the now-defunct merger discussions.

Shares in Santos are down 4.83 per cent on the news.

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