Australia’s Woodside Energy Group Ltd. (WDS) entered a definitive merger agreement on July 21, 2024, to acquire U.S. liquefied natural gas developer Tellurian Inc. (TELL), including its U.S. Gulf Coast Driftwood LNG export project, for $1.2 billion including debt.
Under the terms of the agreement, Woodside will acquire all the outstanding shares of Tellurian for $1.00 per share, payable in cash, representing a premium of 75.44% from the stock’s last close.
Tellurian, based in Houston, is developing the 27.6 million metric tons per annum Driftwood LNG export facility and associated pipeline. It operates through Upstream, Midstream, and Marketing & Trading segments to supply natural gas globally. Driftwood LNG is a fully approved project near Lake Charles, Louisiana, planned to include five LNG production units built in four phases.
Woodside, headquartered in Perth and founded in 1954, is a global energy company engaged in the exploration, development, production, and marketing of hydrocarbons, including LNG, crude oil, and natural gas.
The deal, expected to close in the fourth quarter of 2024, provides the Australian firm access to a fully authorized U.S. project, capitalizing on current challenges faced by other LNG developers due to President Joe Biden’s administration’s pause on approvals for new LNG exports to non-Free Trade Agreement (FTA) countries.
“The deal adds a scalable U.S. LNG development opportunity to Woodside’s existing 10 million metric tons a year of equity LNG in Australia,” said Woodside CEO Meg O’Neill. “The acquisition of Tellurian and its Driftwood LNG development positions Woodside to be a global LNG powerhouse,” she added.
Tellurian has been exploring commercial opportunities with Lazard since January, struggling to advance its proposed Louisiana gas export facility since its 2016 founding. Tellurian’s current EV/Sales (TTM) ratio is 6.41, above the sector median of 2.31.
Woodside aims for the Driftwood project to be ready for a final investment decision for phase 1 from the first quarter of 2025.
For more in-depth information regarding this merger and acquisition transaction, please visit the Deal Metrics page at the link below:
Deal Metrics for the acquisition of Tellurian Inc. (TELL) by Woodside Energy Group Ltd. (WDS)
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Editor’s Note: Baranjot Kaur contributed to this article