A consortium led by international energy investment company XRG, alongside Abu Dhabi Development Holding Company (ADQ) and global investment firm Carlyle, has submitted a final non-binding indicative proposal to acquire all ordinary shares of Santos Limited, Australia’s second-largest gas producer, for USD 5.76 per share in cash.

The offer, announced on June 16, represents a 28 per cent premium to Santos’ last closing share price and values the company at approximately US$18.7 billion.

Santos’ Board has confirmed its intention to unanimously recommend the proposal to shareholders, provided a binding Scheme Implementation Agreement (SIA) can be reached on acceptable terms, no superior proposal emerges, and an independent expert concludes that the proposal is fair, reasonable, and in the best interests of shareholders.

To facilitate this, XRG has been granted exclusive access to conduct confirmatory due diligence, contingent on the parties agreeing to a Process and Exclusivity Deed.

The proposal remains subject to several conditions, including successful completion of due diligence, negotiation and execution of a binding SIA, and receipt of customary regulatory and corporate approvals in Australia and Papua New Guinea.

Regulatory scrutiny is expected, given Santos’ critical energy infrastructure assets.

The XRG-led consortium aims to build on Santos’ legacy as a reliable energy supplier, pledging to maintain the company’s Adelaide headquarters, brand, and operational footprint in Australia and key international hubs.

The consortium intends to work closely with Santos’ management to accelerate growth, support local employment, and invest in the company’s gas and LNG business, as well as low-carbon initiatives such as carbon capture and storage and artificial intelligence-driven efficiencies.

XRG’s strategy is to develop a leading integrated global gas and LNG business, and the acquisition of Santos aligns with this ambition.

The consortium has engaged J.P. Morgan as its financial adviser and Linklaters and Allens as legal advisers for the potential transaction.

The announcement does not constitute a firm intention to make a binding offer, and there is no certainty that a transaction will proceed.

However, the move underscores the growing strategic value of Australian gas assets amid heightened global energy security concerns.