A global consortium led by Abu Dhabi National Oil Company (ADNOC) and backed by private equity giant Carlyle and Abu Dhabi’s Development Holding Company (ADQ) has launched a landmark AUD28.3bn ($18.7bn) all-cash proposal to acquire Santos, Australia’s second-largest gas producer, according to a report by Reuters.
If finalised the deal would represent the largest cash buyout in Australian history.
The offer, made through ADNOC’s energy-focused investment vehicle XRG, values Santos at AUD8.89 per share, a 28% premium to its last unaffected trading price. However, shares closed up just 11% on the day of the announcement, underscoring investor caution around regulatory approval.
The proposed transaction, which gives Santos an enterprise value of AUD36.4bn, including net debt, would significantly expand ADNOC’s and Carlyle’s global LNG footprint, granting the consortium control over Santos’ prized liquefied natural gas (LNG) assets, including Gladstone LNG, Darwin LNG, and stakes in PNG LNG and the undeveloped Papua LNG.
Carlyle’s involvement reflects a broader trend of private equity firms deepening exposure to large-scale, strategic energy infrastructure in response to growing global energy security concerns and the transition toward cleaner-burning fuels such as natural gas.
If successful, the deal would represent one of the most ambitious energy buyouts involving a private equity sponsor and a state-owned entity in recent years. It highlights how global private capital – especially sovereign – affiliated and institutional-backed PE—is positioning itself to dominate the next phase of energy transformation.
The transaction is also notable for its scale, strategy, and geopolitical complexity. Carlyle and its co-investors would be securing direct exposure to key Asia-Pacific LNG export hubs, placing them in close proximity to the world’s fastest-growing energy markets.
While Santos’ board has indicated it intends to unanimously recommend the transaction having rebuffed two earlier, lower bids, any binding offer will require 75% shareholder approval and will have to clear several regulatory hurdles, including Australia’s Foreign Investment Review Board (FIRB), PNG’s Securities Commission and Competition Commission, and CIFIUS in the US.
FIRB clearance is viewed as the most significant risk to the transaction with Santos operating assets deemed vital to Australia’s domestic energy supply, complicating any potential foreign control.
