Australian energy group Santos Ltd (ASX:STO) will buy Eastern Star Gas Ltd (ASX:ESG) in a $924 million deal.
The takeover will give Santos the largest natural gas reserves in NSW, and also involves selling a 20 per cent interest in Eastern Star Gas's permits in the Gunnedah Basin to TRUenergy Holdings, for $284 million.
Santos already owns 20.9 percent of Eastern Star Gas, while TRUenergy owns about 3.8 percent.
Based on Santos's closing share price last week, the offer values Eastern Star Gas at 90 cents a share.
The deal is subject to shareholder and court approval and is expected to be completed by the end of October.
In the 2010 calendar year Santos booked a net profit of $498 million.
