Australia's Santos and Oil Search form merger

Australian independent companies Santos and Oil Search have agreed on a  A$21bn (US $15.4bn) merger that would create a top 20 global oil and gas company.

“Oil Search shareholders will own approximately 38.5 per cent of the merged group and Santos shareholders will own approximately 61.5 per cent,” said the companies in a statement.

The merged companies would own oil and gas assets in Australia, Papua New Guinea (PNG) and Alaska. They will take over 42.5 percent stake in the PNG LNG project, which means they will overtake the 33.2 percent stake owned by Exxon Mobil Corp, the operator of the project.

“Each party will be free to declare ordinary dividends in accordance with existing dividend policy through to signing of the Merger Implementation Agreement. Should a party declare a dividend outside its existing dividend policy before the signing of the Merger Implementation Agreement, there would be an appropriate adjustment to the merger ratio,” said the statement.