PNG M&A - Kumul to acquire 2.6% stake in PNG LNG from Santos

(Originally published on September 1, 2023)

Today, 1st September 2023, it was announced that Santos and Kumul have signed a binding agreement for Kumul to acquire a 2.6% stake in the PNG project from Santos, with an option to acquire a further 2.4%. The deal value for the initial stake is US $576 million and the assumption of about $160 million of project finance debt (total US $736 million). The effective date of the transaction is 31 December 2022 and is conditional only on the approval of the PNG competition regulator. The option for the further 2.4% would be on the same effective date basis and would have a price of $524 million, plus a proportionate share of project finance debt.

This deal is essentially a replacement/restructuring of a deal announced in September 2022 for Kumul to acquire a 5% stake in the project which failed to close despite the offer period being extended twice, with the second extension period expiring yesterday. This original deal was for a 5% stake, effective 31 December 2022, with a deal value of US $1.4 billion, including a proportionate share of PNG LNG project finance debt of approximately US$0.3 billion. Therefore, this newly announced deal can be seen as simply splitting the previous deal into two, with slightly over 50% announced today and the remainder as an option.