China's ENN to become largest shareholder of Australian energy company Santos

Technicians check facilities operated by natural gas distributor ENN Energy Holdings Ltd in Baofeng county, Henan province, April 8, 2015. [Wang Shuangzheng / For China Daily]

SYDNEY - China's private energy player ENN Group will take a A$1 billion ($750 million) stake in Santos, making it the largest shareholder of the Australian company.

ENN Group announced its subsidiary ENN Ecological Holdings would acquire Hony Capital's 11.7 percent shareholding in Santos for $750 million.

Hony will also buy a $380-million stake in ENN through a private agreement.

Santos said the acquisition was subject to certain conditions, including the ENN Group's shareholder approval.

"Santos welcomes the ENN Group onto the register as a shareholder with obvious knowledge of the gas business across the region," the company said in a statement on Thursday.

ENN Group's first exposure to upstream oil and gas could be beneficial longer-term for Santos as it opened new markets in Asia, investment bank Morgan Stanley said in a note on Thursday.

"For ENN Group it provides exposure to the upstream oil and gas business and the ability to learn and develop upstream expertise over time."

Santos shares closed 2.81 percent higher on Thursday.