Australian oil and gas producers Woodside Energy and Santos confirmed on Thursday that they are in talks over a potential merger that would create a large energy group with a market capitalisation of about US$52.6 billion (A$80 billion).
In a brief statement on Thursday, Woodside said: "In response to recent speculation, Woodside confirmed that a potential merger with Santos Ltd is being discussed. The discussions remain confidential and incomplete, and it is uncertain whether these discussions will lead to a transaction. As a global energy company, Woodside is constantly evaluating a range of opportunities to create and deliver value to shareholders. ”
Santos confirmed that "preliminary discussions have been held with Woodside Energy regarding a potential merger." Santos also stressed that any consideration of a merger is at an early stage and there is no agreement between the parties. "It's uncertain if these discussions will result in any deals. ”
If the negotiations do lead to a merger, it will create a huge oil and gas producer and become Australia's major LNG exporter. Australia is one of the world's top three LNG exporters, along with the United States and Qatar.
But a spokesperson for the Australian Competition and Consumer Commission told Reuters that setting up a large LNG exporting company in Australia may require greater scrutiny because of the potential impact on competition.
A potential deal would be one of the largest business mergers in Australia in years, following a series of major deals in the US energy sector in the coming weeks.
In October, ExxonMobil announced an agreement to acquire Pioneer Natural Resources in a $59.5 billion deal. Including net debt, the total implied corporate value of the transaction is approximately $64.5 billion.
Less than two weeks later, Chevron, another American supergiant, said it would buy Hess Corporation in a $53 billion deal, with a total corporate value of $60 billion, including debt. (Compiled by Xiao Chen).
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