Santos and Oil Search will sign a $21 billion merger agreement in a move that will combine two of Australia’s largest oil and gas companies.
On Monday 2 August, Santos and Oil Search reached an agreement for the proposed merger, with the latest offer representing a modified agreement following Santos’ initial rebuffed offer in July.
Oil Search previously stated the earlier offer undervalued the company and its assets in Papua New Guinea.
Under the revised merger proposal, Oil Search will receive 0.6275 Santos shares for each Oil Search share.
Oil Search shareholders will own 38.5 per cent of the merged group and Santos shareholders will own 61.5 per cent.
The proposal implies a transaction price of $4.29 per Oil Search share.
The board of Oil Search intends to unanimously recommend the revised merger proposal.
Santos Managing Director and Chief Executive Officer Kevin Gallagher said the potential merger would create an ‘unrivalled regional champion of size and scale’ with a unique diversified portfolio of oil and gas assets.
The merger would result in the generation of an ASX-listed top-20 global oil and gas company.
It would also create a combined 2021 production of approximately 116 million barrels of oil equivalent.
For more information visit the Santos website.