Australian independents Santos and Woodside Energy will not pursue a potential $53bn merger, ending talks two months after preliminary discussions between the firms first emerged.
Woodside chief executive Meg O'Neill said that for every opportunity the company assesses, it conducts thorough due diligence and will only pursue transactions that are value accretive for shareholders.
"We continue to be disciplined in our approach to mergers and acquisitions and capital management to create and deliver value to shareholders," she said on 7 February. "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 is Australia's largest gas and oil producer with Santos the second largest. The companies produced a total of 766,000 b/d of oil equivalent last year following Woodside's merger with BHP's petroleum arm and Santos' tie-up with Australian independent Oil Search in 2022 and 2021 respectively.
The merged entity would have become the world's fourth-largest listed LNG producer after Shell, ExxonMobil and Chevron, with a market share of about 19pc of Australia's total gas output and 14pc of total LNG exports.
Analysts suggested that despite some efficiencies gained from merging, Woodside and Santos do not have obvious operational intersections. Both firms' LNG output is mainly committed through term contracts, limiting the merged entity's scope to trade LNG in the spot market.
