Kosmos exits takeover talks with Tullow

Kosmos Energy Ltd. has announced the conclusion of initial talks regarding a potential acquisition of Tullow Oil plc.

In a statement issued on Tuesday, December 17, 2024, Kosmos confirmed it would not proceed with a formal offer for Tullow, aligning with Rule 2.8 of the UK Takeover Code.

Earlier reports on December 12, 2024, had disclosed preliminary discussions about a possible all-share deal. However, Kosmos clarified that it reserves the right to reconsider its position under certain conditions, such as an agreement from Tullow’s board to revisit discussions, a competing bid from another party, or significant changes in circumstances as determined by the UK Panel on Takeovers and Mergers.

Kosmos emphasized its commitment to its strategic goals as a leading deepwater oil and gas exploration and production company, with operations spanning Ghana, Equatorial Guinea, and the U.S. Gulf of Mexico. The company reiterated its dedication to transparency and ethical practices as it continues its offshore exploration efforts.

In response, Tullow Oil acknowledged Kosmos' decision to end the discussions. Tullow noted that the talks were in the early stages and had not advanced to the due diligence phase. The company also stated that the announcement of the discussions was triggered by a media leak on December 12.

Despite the conclusion of the talks, Tullow’s Board reaffirmed confidence in its standalone strategy and future prospects. The company highlighted its ongoing efforts to improve its capital structure and address upcoming debt obligations. Additionally, Tullow provided an update on its ongoing Branch Profits Remittance tax arbitration, revealing that the International Chamber of Commerce (ICC) had issued a draft decision, with the final ruling expected soon. Further updates will be shared as the process concludes.

The decision to halt acquisition discussions brings an end to speculation about a merger between the two companies. Kosmos will continue to pursue other opportunities in the energy sector, while Tullow focuses on executing its strategic plans. Both firms remain under industry scrutiny as they navigate their respective paths forward.