Australia oil and gasoline producers Woodside and Santos in merger talks

Shares of Australia’s Santos jumped to a five-week excessive on Friday, on information it is in talks to merge with Woodside Power.

Santos and Woodside Power, two of Australia’s largest oil and gasoline producers, have opened talks to debate a possible merger in what may create a A$80 billion ($52 billion) oil and gasoline behemoth.

“Concurrently, Santos is assessing a range of alternative structural options with a view to unlocking value,” in keeping with a statement issued by Santos on Thursday.

Shares of Santos spiked 11% in early commerce on Friday whereas Woodside slipped 0.7%.

Santos, which has a market capitalization of round 22 billion Australian {dollars} ($14.5 billion), stated during an investor briefing last month that it was engaged on choices to elevate its worth. Woodside boasts a market capitalization of round A$57 billion (greater than $37 billion).

Discussions are nonetheless at an early stage — in statements to the press, each corporations emphasized there may be “no certainty” the discussions may result in a deal.

In June final 12 months, Woodside merged with BHP Group’s oil and gas arm. Santos in 2021 acquired vitality exploration firm Oil Search, however a multibillion-dollar gas drilling project has been derailed by a courtroom problem.