Abu Dhabi’s XRG Walks Away From $19 Billion Santos Takeover
(Bloomberg) – Abu Dhabi National Oil Co., after being unable to agree on basic terms, moved away from an ambitious effort to expand abroad, released Australian natural gas producer Santos Ltd.
On Wednesday, the “Union of Factories” said that the company prevented the XRG unit from submitting the final bid. The decision was definitely disagreement on issues such as commercial and appraisal and tax, and people who knew the subject asked not to be defined by discussing private information.
A remarkable withdrawal for XRG began a major fanfare last year, Adnoc Spinoff and was assigned to distribute Abu Dhabi’s billion to international agreements. The company wants to build a global portfolio, especially in chemicals and liquefied natural gases, and the confusion of the Santos process can slow down a M&A driving that aims to diversify the Middle East Emirate from Ham.
The company offered the indicator proposal in June, Abu Dabi Development Holding Co. and Carlyle Group Inc. The Santos Board, the second largest fossil fuel manufacturer of Australia, proposed an offer of $ 5.76, which represented 28% premium at the stock price.
However, although the shares increased that day, they were far below the bid price, potentially suspected that investors could start the agreement. Santos extended the exclusive time last month and said that the group was looking for more time to complete the necessary care and get approval.
“Sunday will ask questions about Santos’s valuation of Santos after that, Saul Kavonic, an energy analyst in MST Marquee, said. “They may be careful about any skeleton that might have been hidden there, because XRG was a sensitive buyer for most price, but still did not work.”
Santos’s American deposit receipts fell to 9.5% on Wednesday.
Following the LNG supply agreements in the US and Africa, the acquisition of Santos would have access to Adnoc more heft and Asia. However, it can be relatively new for large, cross -border opportunities and it can be difficult to close them.
A planned XRG transfer of German chemical manufacturer Covestro AG, which lasted more than a year to negotiate, had a problem between regulatory barriers. XRG said this month was torpedo by a European Union competition investigation.
The company’s game wasn’t the first for Santos. Kevin Gallagher, the general manager of the gas manufacturer, has rejected a few approaches from peers for the last few years. At the end of the decade, he pioneered an aggressive investment plan to increase production by about 50%, which occasionally disappointed investors looking for higher return.
In 2018, the Adelaide -based company rejected a multiple proposal from the US -based Harbor Energy Ltd. WoodSide Energy Group Ltd.
It was also opposed to the acquisition by a foreign player in Australia. Offshore Alliance, a group representing two major labor unions, urged the government to keep Santos in the hands of Australia ve and to prevent the sale to Adnoc.
He said that the failure of XRG’s proposal was not caused by regulatory problems, or that a major situation-diajens concerns did not emerge. Santos asked XRG and its partners to pay the capital income tax obligation caused by sales.
Adnoc and XRG said on Wednesday that they did not want to merger and buy. This month, the parent company overturned all risks in the listed energy companies, initially gave an asset of about $ 120 billion.
Company acquisition targets will not disappear. Among their plans, the company aims to invest in gas producing assets in the United States and power supply and energy services for data centers there.
“XRG is dedicated to monitoring value current opportunities between gas and LNG, chemicals and energy solutions,” he said. “Investment opportunities have a rich and deep pipeline.”
-Stephen Stapczynski help.
(Updates with the targets of the agreement that started in the third paragraph of Abu Dhabi.)
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