A consortium led by Abu Dhabi National Oil Company ( Adnoc ) has launched an all-cash US$18.7 billion takeover bid for ASX-listed energy company Santos.

Adnoc's global investment arm XRG PJSC is joined in the consortium by sovereign wealth fund Abu Dhabi Development Holding Co ( ADQ ) and US private equity firm Carlyle Group.

The Santos board intends to unanimously recommend that the company’s shareholders vote in favour of the transaction.

Goldman Sachs and JB North & Co are acting as financial advisers to Santos. Rothschild & Co is acting as independent board adviser. Herbert Smith Freehills Kramer is acting as legal adviser to Santos.

The Adnoc consortium is being advised by J.P. Morgan, with Linklaters and Allens as legal counsel.

Major LNG supplier in Asia

Santos is Australia's second largest gas producer, and also has operations in Papua New Guinea, Timor-Leste, and the United States. It is a major liquefied natural gas ( LNG ) supplier across Asia. The company says it is committed to supplying critical fuels such as oil and gas, and abating emissions through carbon capture and storage ( CCS ), energy efficiency projects, use of renewables in its operations, and high-integrity emissions reduction units.

According to the company, LNG growth will be supported by rising demand in Asia, decarbonization through CCS, and the development of low-carbon fuels as energy markets and customer demand evolve.

If the deal is completed, which will include having to be greenlighted by the Foreign Investment Review Board, it will be a major step in Adnoc's ambitions to become a globally diversified player in the natural gas business.

The Adnoc-led consortium aims to build on Santos’ legacy as a trusted and reliable energy producer, unlocking additional gas supply for the Australian company’s customers, and strengthening domestic and international energy security.

The group intends to maintain Santos’ headquarters in Adelaide.