The Australian Competition and Consumer Commission (ACCC) has said that it will not oppose Santos’ $2.15bn acquisition of Quadrant Energy.
The approval represents the fulfilment of all outstanding conditions for the proposed deal.
Santos now expects to complete the transaction in the coming weeks. The acquisition will give the company increased ownership of low-cost, long-life conventional natural gas assets in Western Australia.
Santos managing director and CEO Kevin Gallagher said: “It is materially value-accretive for Santos shareholders and advances Santos’ aim to be Australia’s leading domestic natural gas supplier.”
“We already have very significant growth projects across our five core assets, and Quadrant’s recent oil discovery at Dorado is another exciting opportunity for us.”
Santos and Quadrant jointly own gas processing facilities and associated fields at Varanus Island and Devil Creek.
Following an investigation, ACCC ruled that the transaction is not likely to reduce competition in the supply of gas to domestic customers in the state.
ACCC chairperson Rod Sims said: “The ACCC considers that a combined Santos/Quadrant will continue to face strong competition from a range of suppliers, including large LNG producers such as Chevron and Woodside.
“Most market participants believe the Western Australian domestic gas market is currently oversupplied. While the demand-supply balance could tighten in future, the ACCC considers that the proposed acquisition will not have a significant impact on future gas prices.”
As part of the investigation, the regulatory body consulted relevant government departments and market participants.
Santos signed an agreement in August to acquire Quadrant in a transaction expected to deliver synergies ranging between $30m and $50m a year.
The agreement came after Quadrant and its joint venture partner Carnarvon Petroleum discovered the Dorado oil field that is regarded as one of the biggest discoveries ever made offshore Western Australia.
Earlier this year, Santos rejected a $15bn acquisition bid from US firm Harbour Energy.