XRG consortium’s $19 billion bid for Australia’s Santos fails
XRG, the lower-carbon global investment arm of Abu Dhabi’s national oil company ADNOC, has walked away from a $19 billion takeover bid for Australian energy company Santos after the parties failed to agree on key terms.
Santos shares fell 12% on Thursday in trading on Sydney’s ASX, wiping some $2 billion off its market value.
A consortium led by XRG and including Abu Dhabi sovereign wealth fund ADQ and private equity firm Carlyle made the play for Australia’s second-largest gas producer in June.
While the deal promised to be the largest all-cash buyout in Australian history, analysts expressed doubts over whether the sale would materialize after a lukewarm reception from shareholders and uncertainty over whether it would win regulatory approval.
Santos, a perennial takeover target still smarting from failed talks with domestic rival Woodside Energy last year, has stakes in prized gas assets in Papua New Guinea as well as its major Australian LNG projects.
The failed deal and three months of lost time is also a setback for XRG, which is rapidly scaling up global operations and has set an ambitious goal to build a gas and LNG business with capacity of 20-25 million metric tons a year by 2035.
The company, which was launched late last year with an enterprise value of more than $80 billion, is also facing headwinds in Europe, where its $17 billion acquisition of German chemicals firm Covestro is under review by the European Commission.
Mubadala’s Al Mubarak says sovereign funds taking the lead
ABU DHABI, United Arab Emirates – Kicking off the UAE’s annual Investopia conference on Wednesday, Mubadala chief Khaldoon Al Mubarak pointed to the more active stance that the country’s sovereign wealth funds are taking in the global investment landscape.
“Sovereign funds now have the responsibility and opportunity to go from asset allocators to enablers of global progress,” the Managing Director and Group CEO of Abu Dhabi’s second-largest sovereign wealth fund said. Al Mubarak noted that the emirate’s sovereign funds — Mubadala, Abu Dhabi Investment Authority and ADQ — are among the world’s top 10 most active sovereign investors in 2023, which he said, “speaks to the momentum that is building over here.”
Mubadala plans to invest more in the U.S. and has increased its long-term allocations for Asia “in line with megatrends and demographics, including “Japan, China, Korea and, of course, India,” Al Mubarak said.
On the domestic front, UAE Minister of Economy Abdulla bin Touq said in his opening remarks that the ministry is working to better integrate the seven disparate emirates that make up the country. “In the UAE, each emirate has its own strength. We’re now working to enable those emirates to integrate and complement each other to build economic clusters that supercharge the whole economy.”
Thousands of investors have flocked to the third edition of Investopia, a marquee event for the government’s “Projects of the 50” initiative, first announced in 2021. The UAE aims to build the world’s most innovative economy in collaboration with the global investment community. Funds that manage a total of more than $500 billion in assets are attending, according to organizers.
Slated to speak during the two-day conference are Adam Goldstein, Founder and CEO of aviation startup Archer; Eric Cantor, General Manager and Vice Chairman of Moelis; Antonio González, Founder and CEO of Sunset Hospitality Group; Nathan Sheets, Global Chief Economist at Citi; Giorgio Furlani, CEO of AC Milan; Ulrike Hoffmann-Burchardi, Head of CIO Equities at UBS and Gabrielle Rubenstein, Co-Founder and Managing Partner of Manna Tree.
