Santos faces ACCC probe into proposed Quadrant buyout
THE competition watchdog is investigating Santos’s proposed $2.9 billion acquisition of Quadrant Energy for a potential breach of merger rules.
The Australian Competit- ion and Consumer Commission is scrutinising the buyout proposal amid concerns there will be too much concentration in Australia’s gas supply market.
Announced in August, the deal was trumpeted by Santos as a sign of its growth potential in the wake of its earlier rejection of a $14.5 billion takeover bid by energy investment vehicle Harbour Energy.
Quadrant, owned by Brookfield Business Partners, Macquarie Capital and others, is
the former Australian subsidiary of US group Apache Energy.
It is an oil and gas explorer with 20 per cent of the WA gas market. Santos’s stock price surged 11 per cent on the day the Quadrant deal was unveiled and it has rallied
5 per cent since, closing at
$7.31 yesterday.
The company’s stock price tends to trade in line with oil price movements.
The ACCC is wary there might be too little competition in the Australian gas supply market.
However, last month it waved through a $13 billion bid for gas pipeline group APA from a consortium led by Hong Kong-based Cheung Kong Infrastructure.