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ADNOC-Led Consortium Makes $18.7B Bid to Buy Australia’s Santos
Australia's second-largest gas producer Santos said on Monday it intended to support an all-cash $18.7 billion takeover bid from an international consortium led by Abu Dhabi's National Oil Company (ADNOC), which wants to grow a global gas business.Santos shares jumped 11% by the close on Monday, but that was well short of the 28% premium offered against their previous close, which analysts said reflected risks that the deal may not win regulatory approval in Australia.ADNOC's investment arm XRG with Abu Dhabi Development Holding Company (ADQ) and private equity firm Carlyle proposed to offer $5.76 (A$8.89) per Santos share. The stock last traded at A$7.72.Taking into account net debt, the deal gives Santos an enterprise value of A$36.4 billion, which would make it the largest all-cash corporate buyout in Australian history, according to FactSet data."For ADNOC, this is in line with their aggressive growth plans," said Kaushal Ramesh, vice president, gas and LNG research, at Rystad Energy.The takeover bid emerged as oil prices reached multi-week highs as Israel and Iran traded air strikes, sparking concerns oil exports from the Middle East could be widely disrupted.With Santos in its fold, the XRG-led consortium would gain control of two Australian liquefied natural gas operations - Gladstone LNG and Darwin LNG, as well as stakes in PNG LNG and the undeveloped Papua LNG. Santos' interests in Papua New Guinea are considered its most prized assets.The company is also developing an oil project in Alaska, Pikka, due to start producing in mid-2026.XRG said in June it aims to build a gas and LNG business with capacity of between 20 million and 25 million metric tons a year by 2035. Santos last year sold 5.08 million tons of LNG, with more than 60% of that from Papua New Guinea."What ADNOC really wants is the LNG assets, since they are inside the Asia Pacific basin. Since their plan is to expand in LNG, they will want assets close to where the future of demand lies," Rystad's Ramesh said.Australian Treasurer Jim Chalmers, who makes the ultimate decision on major takeovers based on advice from the Foreign Investment Review Board, declined to comment on whether he had any concerns about an ADNOC-led takeover of Santos."It would be a big decision," he said in an interview with Australian Broadcasting Corp TV.Santos said the latest offer came after it had rejected two previous proposals made by the consortium in March at $5.04 and $5.42 per share that were not made public.Its board said if a binding offer is made it "intends to unanimously recommend that Santos shareholders vote in favour of the potential transaction, in the absence of a superior proposal."The XRG consortium said it was negotiating to carry out due diligence with Santos on an exclusive basis before formalising the offer which would need at least 75% support from Santos investors."The proposed transaction is aligned with XRG's strategy and ambition to build a leading integrated global gas and LNG business," it said in a statement.XRG, which was set up in November, last month acquired a stake in an offshore gas block in Turkmenistan. ADNOC has also struck several international deals for assets to sit under XRG, including gas and LNG interests in Mozambique.Regulatory Hurdles Could Be SteepSantos said the deal required approval from Australia's Foreign Investment Review Board (FIRB), Australian Securities and Investments Commission, National Offshore Petroleum Titles Administrator, PNG Securities Commission, PNG Independent Consumer and Competition Commission and Committee on Foreign Investment in the United States (CIFIUS).XRG said it would maintain Santos' headquarters in South Australia, in a move to try and appease some regulators.MST Marquee senior energy analyst Saul Kavonic said FIRB approval "may be a major risk to the deal" as Santos controls significant critical energy infrastructure in Australia.Any spin-off of domestic infrastructure assets to potentially satisfy regulators would be difficult, as the facilities are saddled with decommissioning costs, he said.Santos rejected a $10.8 billion offer from private equity-backed Harbour Energy in 2018 and walked away from talks with its bigger Australian rival Woodside Energy WDS.AX last year to create a possible A$80 billion oil and gas giant, saying it would look for other ways to bolster its value.In February it reported a nearly 16% fall in underlying annual profit in 2024 and cut its dividend by 41%.While Santos has long been a takeover target, Kavonic said a competing bid "is very unlikely as only ADNOC may be willing to pay such a premium to realise their global LNG ambitions."($1 = 1.5425 Australian dollars)(Reuters - Reporting by Scott Murdoch in Sydney and Emily Chow in Singapore, additional Shivangi Lahiri in Bengaluru; Editing by Kim Coghill and Sonali Paul)
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EnBW, DHL Group Ink PPA for He Dreiht Offshore Wind Farm
EnBW Energie Baden-Württemberg (EnBW) and Bonn-based DHL Group have signed a power purchase agreement (PPA) for the electricity that will come from the 960MW He Dreiht offshore wind farm, currently under construction off Germany.The long-term PAA will cover approximately 16% of DHL Group’s current annual electricity needs in Germany, supplying 80 GWh of green electricity per year for the term of 10 years.The agreement between the two companies will take effect in step with the phased commissioning of the wind farm through to spring 2026.“Well thought-out energy management is crucial for us to achieve our goals. The agreement with EnBW for the He Dreiht wind farm is another important step on our path to net-zero emissions in logistics by 2050.“The long-term agreement with our energy partner ensures a credible supply of electricity from renewable sources for our operations and contributes to supporting the energy transition. This is an example of how fostering proactive supplier relationships can contribute to a more sustainable and positive ecosystem,” said Anna Spinelli, Chief Procurement Officer at DHL Group.“We are delighted to support DHL Group on its journey towards zero-emission logistics. This partnership underscores our position as a major provider of sustainable energy across Europe.“PPAs are a targeted and highly flexible instrument for advancing the decarbonization of industrials. They support the companies we partner with in meeting their sustainability goals while underpinning the financing of our projects: a win-win situation for industry and the climate,” added Matthias Obert, Executive Director Trading at EnBW.:He Dreiht is being developed by energy utility EnBW in partnership with the consortium made up of Allianz Capital Partners, AIP and Norges Bank Investment.More than half of the electricity that will be available from He Dreiht is already under contract.
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Petronas estimates that the proposed ENI joint venture will take between one and two years to set up.
Petronas anticipates that it will take between one and two years to establish a joint venture proposal with Italian energy group Eni for some upstream assets located in Indonesia and Malaysia. This was revealed by a senior executive at the state-run company on Tuesday. In February, the companies signed an agreement on a joint venture to combine approximately 3 billion barrels equivalent of oil (boe) with an additional 10 million boe in exploration potential. The idea behind the combination was to create an independent entity that could be self-financed, Mohd. Jukris Abdul wahab, executive vice president of Petronas and chief executive officer of upstream, told the Energy Asia Conference in Malaysia's capital. Eni's Chief Operating Officer, Guido Brusco said: "This is a major game changer in the region." We are combining assets in Malaysia and Indonesia, especially the Kutai Basin." Eni's Kutai Basin investments include the Northern Hub and Gendalo Gandang Hubs, which contain massive gas reserves. Petronas said that it would like to include oil projects in Indonesia’s Kutai Basin as part of the joint venture. It proposed to swap its assets and blocks in Malaysia and Indonesia for Eni’s blocks in Indonesia. Petronas has said that it will exclude Indonesian assets awarded to the company recently, including the Binaiya block and the Serpang block. (Reporting and writing by Florence Tan and Ashley Tang, Emily Chow and Clarence Fernandez; editing by Tom Hogue and Clarence Fernandez).
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Dalian iron ore falls as traders evaluate mixed Chinese macro-data
Iron ore prices fell on Tuesday, as traders assessed mixed macroeconomic reports from China's top consumer. However, resilient steel mill profit lent some support. As of 0255 GMT, the most traded September iron ore contract at China's Dalian Commodity Exchange was trading 0.43% lower. It was priced at 696.5 Yuan ($97.00) per metric ton. The benchmark July Iron Ore price on the Singapore Exchange dropped 1.03%, to $93.1 per ton. The National Bureau of Statistics reported on Monday that China's crude-steel output fell 6.9% in May from a similar period a year ago to 86.55 millions tons. Official data released on Monday showed that new home prices dropped in May, continuing a two-year stagnation. This highlights the challenges facing the housing sector, despite multiple rounds of support policies. Retail sales, which are a measure of consumption, have picked up, providing temporary relief in the midst of a fragile truce between China and the United States. Galaxy Futures, a broker, stated that while blast furnace production is at its peak, profits are high and steel mills do not feel the need to reduce production. According to Mysteel, as of June 12th, 60% of China's blast furnace steel mills reported positive margins. Mysteel data revealed that the volume of iron ore arriving at ports fell by 8.62% on a weekly basis to 23,85 million tonnes as of 13 June. Coking coal and coke both increased by 0.77% and 0.74 %, respectively. The benchmarks for steel on the Shanghai Futures Exchange have lost ground. The price of rebar fell by 0.03%. Hot-rolled coils dropped 0.13%. Wire rods lost 0.67%. Stainless steel was down 0.6%. $1 = 7.1805 Chinese Yuan (Reporting and editing by RashmiAich; Michele Pek)
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GRAINS - Chicago soybeans fall on favorable weather and weaker soyoil
Chicago soybean futures declined on Tuesday after a two-day rally, due to favorable weather conditions for U.S. crops and lower soyoil price. As of 0222 GMT the most active soybean contract fell 0.23%, to $10.67 a bushel. This halted gains fueled by surging crude prices and stricter U.S. biofuel blend mandates. On Monday, soybeans reached a new high of one month and soyoil an all-time high of 20 months. Analysts say that tensions between Iran and Israel could cause energy prices to rise, causing a spike in grain prices. Andrew Whitelaw is an agricultural consultant with Episode 3. The region has a major impact on the grain markets. The Soyoil Contract dropped by 0.85% to 54.64 cents a pound as traders made profits and removed some support for soybeans. Oilseeds continue to be affected by a weakening demand, uncertainty over tariffs and global competition. The price of corn fell 0.06%, to $4.35 per bushel. This was due to the weekend rains that were beneficial for key growing areas, such as the Plains, the Northwest and Southeast Midwest, and parts of the Plains. However, strong export data helped curb losses. The latest U.S. corn harvest inspections reached 1.67 million tons, which is higher than expected. According to U.S. Government data, the weekly condition ratings of the corn crop in the United States also improved. They were the highest they had been for several years at this time. Soybean ratings declined. The price of a bushel rose by 0.84%, to $5.41. However, harvest pressures limited gains. After a slow start, the U.S. harvest of winter wheat is now expanding. The USDA reported that the winter wheat harvest was 10%, up from just 4% one week earlier but still behind the average for the past five years of 16%. Analysts had on average estimated harvest progress as 11%. Traders said that commodity funds bought soyoil contracts at the Chicago Board of Trade on Monday, but sold corn, soybeans, soymeal and wheat futures.
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Singapore exports fall unexpectedly by 3.5% in May
Singapore's domestic non-oil exports dropped 3.5% from the same period a year ago, according to government data released on Tuesday. This was in contrast with analyst expectations, as shipments into the United States plummeted a month after Washington announced new tariffs. The drop was compared to a poll prediction of an 8.0% growth year-on-year, and came after a 12.4% increase in April. Electronics shipments rose slightly, but petrochemicals and non-monetary gold as well as specialised machinery dropped. Brian Lee, an economist at Maybank, said that a boost in exports caused by frontloading is cooling. This can be seen in the 20,6% drop in exports from the United States compared to a year ago after five months of growth. He suggested that the drop could have been made worse by a large base from a year ago. In May, exports to Taiwan and Indonesia increased on an annual basis, while those to Thailand, Malaysia, and the U.S. decreased. The outlook remains uncertain for the financial center as the United States' tariffs are expected to slow global trade. Singapore's GDP forecast was downgraded in April from 1%-3% to 0%-2%, citing the risk of a recession and job loss. Gan Kim Yong, Singapore's Trade Minister, said in May that the U.S. would not budge from its 10% tariff on Singapore but that the nation was working to negotiate concessions for pharmaceutical tariffs President Trump had threatened to implement. Singapore, one of the most open economies in the world, is often viewed as a bellwether economy for global growth. Its international trade dwarfs that of its domestic market. (Reporting and editing by John Mair; Reporting by Jun Yuan Yong)
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Oil prices jump as Trump calls for Tehran to be evacuated.
U.S. Stock Futures fell and Oil Prices rose on Tuesday as Investors were shaken by U.S. president Donald Trump's request for everyone to leave Tehran, with the fifth day of Israel-Iran combat sowing fears of an broader regional war. The markets were tense after another report claimed that Trump asked the national security adviser to prepare the situation room when he cut his trip short to the Group of Seven Summit in Canada. Trump had earlier called on everyone to evacuate Tehran immediately and reiterated the fact that Iran should've signed a deal with the United States. Recent developments have triggered a wave in the early Asian trading. S&P futures dropped 0.46% and European futures declined 0.69%. Crude prices briefly rose more than 2%. The market is now exhibiting some risk aversion as it adds another element of uncertainty to the market. This was said by Tony Sycamore a market analyst with IG. Wall Street closed Monday higher after sources said that Iran wanted an immediate ceasefire between Israel and Trump, which also dampened a rally of crude prices. Israel's attack on Iran's state-run broadcaster and its uranium-enrichment facilities escalated the Iran-Israel air conflict, the largest battle between two long-time enemies. Investors moved towards safe-haven assets like gold, which gained 0.5%. Meanwhile, a rise in U.S. Treasuries drove yields down across the curve. The yield of the benchmark 10-year bond was about 2 basis points lower at 4.43%. The dollar strengthened against the euro and yen, while maintaining a tighter range. The broadest MSCI index of Asia-Pacific stocks outside Japan rose a little, and futures tracking Hong Kong’s Hang Seng Index also increased a bit. Investors will focus on interest rate decisions from a number of central banks this week, with the Bank of Japan's decision expected later that day. The BOJ's two-day meeting is expected to end with the BOJ maintaining short-term rates at 0.5%. However, markets will be interested in the institution’s view on quantitative tightening. The Nikkei 225 index in Japan rose 0.5%. Meanwhile, the yen fell to 144.96 dollars per yen. Investors expect the BOJ will consider slowing down its reductions in bond purchases next, as it focuses on avoiding major market disruptions, and tries to wean off the decade-long massive stimulus. This would be the country's first major decision after recent auctions showed a declining appetite for longer-dated bonds and drove yields on the country's debt to record levels. On Tuesday, the yields of 30-year and forty-year bonds were largely stable. Investors will pay attention to the comments of officials during a week that is filled with meetings by central banks around the world as they try to navigate Trump's unpredictable tariff policies and the impact they have on the global economic situation. On Wednesday, the Federal Reserve will likely hold its rates at the same level. However, the attention once again will be focused on the future path that Fed Chair Jerome Powell outlines for rate reductions. Traders have priced in two rate cuts by the end the year. Sycamore, IG's central banker, said: "To be a Central Banker is a challenging job right now. On top of the current tariff situation and trade policy as well as the signing of deals by deadlines there is this Middle East uncertainty." The macro backdrops we are seeing now are not more difficult than they were before. The risk of prolonged unrest and disruptions in oil supply have sent commodities prices higher. Brent crude futures contract rose 0.34% to $73.47 per barrel. West Texas Intermediate crude rose 0.43% to $72.09. Gold was trading at $3,393.05 an ounce, up by 0.3% for the day.
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London metals fall as dollar strengthens, Middle East tensions increase
The price of metals fell in London on Tuesday due to a stronger dollar, and the escalating tensions with Iran and Israel. As of 0124 GMT, the London Metal Exchange reported that three-month copper was down by 0.3%, at $9,673.50 a metric ton. LME aluminium fell by 0.1% to 2,511.50 dollars a ton. Zinc fell 0.4% at $2,649; lead fell 0.4% at $1,998.50; and nickel dropped 0.4% at $15,005. Tin fell 0.4% to $32,505. The SHFE's most-traded contract for copper gained 0.3%, to 78.500 yuan per metric tonne ($10,934.67). Israel and Iran attacked one another for the fifth day in a row on Tuesday. U.S. president Donald Trump called on Iranians to leave Tehran citing his country's rejection to a deal that would curb nuclear weapons development. As geopolitical tensions escalated in the Middle East, U.S. futures fell and oil prices rose. The dollar index increased by 0.3% against its competitors. The dollar's strength makes commodities priced in greenbacks more expensive for buyers of other currencies. Better-than-expected retail data from China released on Monday offered some relief and raised hopes for a rise in metals demand. As part of the deal between the United States and the United Kingdom announced during the G7 Summit, on Monday, the U.S. will impose a tariff-free quota for steel and aluminum imported from the United Kingdom. SHFE aluminium was unchanged at 20,400 Yuan per ton. Lead was also flat at 16,915 Yuan. Nickel fell by 1.1%, to 118.400 Yuan. Zinc gained 0.3%, at 21,870 Yuan. Tin fell 0.4%, to 263,620 Yan. Click or to see the latest news in metals, and other related stories.
Lawyers say that the US golden share of U.S. Steel may scare away investors.
National security lawyers warned on Monday that the unusual move made by the Trump Administration to grant itself a golden stake in U.S. Steel, as part of an agreement to approve Nippon Steel’s takeover of this well-known U.S. firm, could scare away foreign investors.
Commerce Secretary Howard Lutnick said on Saturday that "President Trump secured a perpetual Golden Share in Nippon Steel’s acquisition of U.S. Steel." He listed a number of corporate decisions over which the Trump administration will now have veto authority.
Investors bet that the Japanese company's $14.9 billion bid to buy the struggling U.S. Steel would reach its conclusion soon.
Joshua Gruenspecht is a Wilson Sonsini national security attorney. He says that the Trump administration made an unusual decision by including the golden share as part of the national security agreement. This would have caused foreign investors to be wary.
It leads to the question, "Am I going get what I purchased? "Do I have control over this asset?" He said.
Nippon Steel declined comment. U.S. Steel, the White House, Commerce and the Treasury Department, who lead the Committee on Foreign Investment in the U.S., which examines foreign investments to determine if they pose a national security risk, did not respond immediately to requests for comments.
'RISKY' AND 'UNPRECEDENTED"
On Friday, the Trump administration approved the merger via an executive agreement and an order to ease national security concerns. This culminated a turbulent 18-month process.
Questions had been raised about the golden stake that President Donald Trump suggested would give the American people 51% of the struggling U.S. company as part the acquisition.
Lutnick wrote in his post on Saturday that the share would stop companies from delaying or canceling investments worth $14 billion, moving production or jobs overseas, or shutting down or idleing plants before a certain date, without the consent of the president.
The government also has a veto on a possible relocation of U.S. Steel headquarters from Pittsburgh, Pennsylvania. This could include a transfer or job overseas.
A U.S. official confirmed a New York Times report that this power is granted by a single class of preferred stock called Class G, which stands for "gold." The board member is directly appointed by a president.
According to lawyers consulted by, it is not unusual for CFIUS in an NSA to require that certain board members are approved by the committee. It was a novel approach to have a board member with a fiduciary responsibility to the president.
Jim Secreto said that a golden share approach was both risky and unheard of. He added that the United States might protest if Beijing demanded something similar in order to approve an American company's investment into a Chinese firm. "Trump’s dealmaking creates uncertainty for investors around the world and sets a precedent which could complicate future deals across borders."
Before Trump became involved, these companies offered the U.S. government significant authority. Nippon Steel, in a term sheet for a national-security agreement that was submitted to CFIUS and obtained by the, pledged that the majority of U.S. Steel board members will be American and that CFIUS would approve three of these "independent U.S. directors".
The term sheet said that "U.S. Steel can reduce production capacity if and only when it is approved by the majority of Independent U.S. directors." It also stated that the core U.S. management will be U.S. Citizens. Reporting by Alexandra Alper, Steve Holland and Rod Nickel
(source: Reuters)