A mega-merger between Santos and Origin Energy could drive $3 billion of cost synergies and help both weather rock-bottom oil prices, according to Credit Suisse.
The deal as envisaged by the bank’s energy equities team would involve spinning off Origin’s utilities business, while the oil and gas operations would be combined to create “Soritos E&P”.
“We are struck by the beauty of both the industrial and political logic to the deal at a time when the companies are on their knees and the east coast market is staring down the barrel of an uncomfortable date with destiny,” the analysts said in a note to clients.
A zero-premium merger would be the most logical structure for combining the two companies, which are both suffering from the impact of funding large liquefied natural gas projects in Queensland just as cash flows are being hit by plunging crude oil prices, they said.
“A more open mindset to a merger could see huge synergies realised at a time when, particularly at the LNG projects, political and industrial logic is compelling to get a deal done,” the analysts led by Mark Samter said in the report.
Full content: The Wall Street Journal
Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.
Featured News
DOJ and FTC Introduce Website for Reporting Anti-Competitive Healthcare Practices
Apr 18, 2024 by
CPI
US Congress Advances Legislation to Compel TikTok Sale
Apr 18, 2024 by
CPI
UK Financial Sector Advocates Enhanced Regulatory Accountability
Apr 18, 2024 by
CPI
Google and All 50 States Defend $700 Million Consumer Settlement
Apr 18, 2024 by
CPI
Colorado Enacts First Law to Protect Consumer Brainwave Data
Apr 18, 2024 by
CPI
Antitrust Mix by CPI
Antitrust Chronicle® – Economics of Criminal Antitrust
Apr 19, 2024 by
CPI
Navigating Economic Expert Work in Criminal Antitrust Litigation
Apr 19, 2024 by
CPI
The Increased Importance of Economics in Cartel Cases
Apr 19, 2024 by
CPI
A Law and Economics Analysis of the Antitrust Treatment of Physician Collective Price Agreements
Apr 19, 2024 by
CPI
Information Exchange In Criminal Antitrust Cases: How Economic Testimony Can Tip The Scales
Apr 19, 2024 by
CPI