Woodside shelves $80b merger with rival Santos

Oil and gas giant Woodside said it has ended merger talks with its smaller rival Santos over a proposed $80 billion tie-up.

Having previously dampened expectations of a successful deal to create one of the world’s biggest liquid natural gas (LNG) companies, Woodside chief executive Meg O’Neill confirmed on Wednesday that talks have ceased after nearly nine weeks of due diligence.

Woodside’s Macedon gas plant near Onslow in West Australia.
Woodside’s Macedon gas plant near Onslow in West Australia.Credit: Woodside

“Woodside has ceased discussions regarding a potential merger with Santos,” Woodside said in a statement to the ASX.

“For every opportunity Woodside assesses, it conducts thorough due diligence, and will only pursue a transaction that is value accretive for its shareholders,” the company said, giving no further details about the decision.

O’Neill said that although the discussions with Santos did not result in a transaction, Woodside still sees significant opportunities for value creation in the global LNG sector.

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

The oil and gas giant reported in late January that it hit record production in 2023, pumping out 187.2 million barrels of oil and reaching the top end of its own forecasts.

The confidential merger talks between $57 billion Perth-based Woodside and $22 billion Adelaide-based Santos first came to light in early December.


At the time, analysts said the benefits of a tie-up were largely limited to combining both companies’ LNG assets and reducing some management overheads, giving the combined entity estimated savings between $303 million and $606 million.

They also said it would be difficult for both sets of shareholders to agree on fair value, given Santos’ shareholders were looking for a premium and Woodside’s share price had come under pressure.

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