Woodside says talks over with Santos over $80b merger

Woodside Energy has walked away from a contentious $80 billion merger with Santos but flagged other tie-ups to expand its global LNG portfolio.

Two months after confirming it was discussing a takeover of Adelaide-based Santos, Woodside said it quit the early-stage talks after failing to find shareholder value in the combination.

Woodside shareholders had questioned the benefits to the WA group of a merger between Australia’s two biggest listed energy companies and the premium being demanded by Santos investors.

Woodside chief executive Meg O’Neill told the Australian Securities Exchange on Wednesday that “for every opportunity Woodside assesses, it conducts thorough due diligence, and will only pursue a transaction that is value accretive for its shareholders”.

“We continue to be disciplined in our approach to mergers and acquisitions and capital management to create and deliver value for shareholders,” Ms O’Neill said.

However, having previously indicated that a desire to expand its LNG interests was a major motivation behind the potential Santos deal, she said on Wednesday that “while the discussions with Santos did not result in a transaction, Woodside considers that the global LNG sector provides significant potential for value creation”.

Woodside shares jumped 1.5 per cent on the news to be trading at $32.76 as at 9.25am. By comparison, Santos shares slumped nearly 6 per cent to $7.40.

Santos has yet to comment.

Woodside is keen to bulk up on LNG, seeing the heating fuel as “incredibly important” during the world’s transition to cleaner fuels.

More to come.