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Shares of Australia’s Santos jumped to a five-week high on Friday on news the company is in talks to merge with Woodside Energy.
Santos and Woodside Energy, two of Australia’s largest oil and gas producers, have opened talks to discuss a potential merger in what could create an 80 billion Australian dollar ($52 billion) oil and gas behemoth.
“Concurrently, Santos is assessing a range of alternative structural options with a view to unlocking value,” according to a statement issued by Santos on Thursday.
Shares of Santos spiked 11% in early trade on Friday while Woodside slipped 0.7%.
Santos, which has a market capitalization of around AU$22 billion, said during an investor briefing last month that it was working on options to lift its value. Woodside boasts a market capitalization of around AU$57 billion.
Discussions are still at an early stage — in statements to the press, both companies emphasized there is “no certainty” the discussions would lead to a deal.
In June last year, Woodside merged with BHP Group’s oil and gas arm. Santos in 2021 acquired energy exploration company Oil Search, but a multibillion-dollar gas drilling project has been derailed by a court challenge.
Santos shares rose to a five week high