POSCO acquires Senex for US$670 million Report

Deal Insight 16 December 2021

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Report summary

POSCO International has acquired Senex Energy by way of a scheme of arrangement. POSCO International is a global division of the South Korean conglomerate POSCO with upstream assets in South Korea, Myanmar, Vietnam, Malaysia and Peru. The acquisition of Senex is its first foray into the Australian upstream industry. POSCO's move highlights the attractiveness of regional gas markets, particularly in supply-constrained areas such as Eastern Australia. The deal also illustrates the growing role of ‘other' buyer types in the upstream M&A space, particularly conglomerates, traders, miners and utilities, in addition to local E&P players. And lastly, this transaction shows the importance of a large, diversified portfolio to increase resilience and manage a growing range of industry risks.

Executive summary
Transaction details
Upstream assets
- Roma North (formerly, Western Surat Gas Project)
- Atlas
Deal analysis
- Bid premium
Upsides and risks
- Upsides
- Downsides
Strategic rationale
- Portfolio diversification and expansion
- Exposure to Australian east coast gas market
- Cash generation
- Hancock Energy farm-down
- Senex Energy
Oil & gas pricing and assumptions