ENERGY GIANTS JOIN FORCES IN $21BN DEAL
SANTOS and Oil Search have signed a merger agreement, cementing a $21bn deal that will see the combined business catapult into the world’s 20 largest energy companies.
Santos will own 61.5 per cent of the merged company to Oil Search’s 38.5 per cent,
a boost for Oil Search to the previous 63-37 per cent weighting that was rejected by its board.
Santos expects the merger to unlock pre-tax synergies of $US90M-$US115M ($122m$156m) a year excluding integration and other one-off costs, which it said benefits both sets of shareholders.
Oil Search confirmed it
intended to recommend shareholders vote in favour of the proposal, which would create an Australia and Papua New Guinea oil and gas giant.
The combined company will be headed by current Santos chief executive Kevin Gallagher, with three Oil Search directors likely to be included on the joint board.
Santos said the deal would
create a regional champion with a $21bn market capitalisation and among both the top 20 listed ASX companies and also 20 biggest oil and gas companies in the world.
“The merger represents an attractive combination of two industry leaders to create a regional champion,” Santos chairman Keith Spence said.