Why XRG's $36b Santos bid fell apart
The record bid crumbled under a looming tax liability, regulatory demands and gas supply tensions after months of fraught negotiations.
XRG’s $36.6 billion tilt at Santos collapsed in a tangle of last-minute disputes over a looming PNG tax bill, regulatory approvals and domestic gas supply, leaving one of Australia’s biggest ever takeover attempts dead just days before a binding bid deadline.
XRG shaved as much as $300 million off its offer for Santos after the gas company refused to accept liability for a looming Papua New Guinea tax bill.
Multiple deal sources confirmed that a letter from ADNOC chair Sultan Ahmed Al-Jaber to Santos late on Wednesday, Sydney time, included an adjusted offer price net of a possible $300 million capital gains tax bill tied to Santos’ PNG LNG project. The liability would arise under incoming tax legislation.
Santos’ demand that XRG and its partners secure upfront Foreign Investment Review Board (FIRB) approval — as Brookfield did for its $10.6 billion Origin Energy takeover — was also described as a dealbreaker, one source said.
