Sydney Airport opens its books to takeover group; Qantas deal with JAL scuttled by ACCC watchdog

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Sydney Airport officials on Monday (13 September) said they have agreed to open the books to a group of bidders working to take over the airport. The bidders submitted a higher bid for the airport, taking it to A$23.6 billion (US$17.4 billion). Sydney Airport is Australia’s only listed airport operator and a purchase would be a long-term bet on the travel sector which has been battered by the COVID-19 pandemic and near shutdown of international aviation.

Sydney Airport

The improved offer of A$8.75 a share – an increase of 3.6 percent – follows prior proposals from the consortium pitched at A$8.45 and A$8.25, both of which were rejected by the airport operator’s board as inadequate. The bidding consortium, Sydney Aviation Alliance (SAA), is comprised of Australian investors IFM Investors, QSuper and AustralianSuper and US-based Global Infrastructure Partners. SAA has been granted non-exclusive due diligence that is expected to take four weeks after signing a non-disclosure agreement, Sydney Airport said. If SAA makes an acceptable binding proposal, the current intention is for the board to recommend it in the absence of a superior offer, the airport operator added.

Any takeover deal will require an independent expert’s report, approval from 75 percent of shareholders and approval from the competition regulator and the Foreign Investment Review Board, in a process that typically takes months to complete.

An SAA spokesperson said the consortium welcomed the announcement and looked forward to working with Sydney Airport’s board to finalise the transaction.

Qantas deal rejected by consumer watchdog

The Australian Competition and Consumer Commission (ACCC) said Monday it has rejected an application from Qantas and Japan Airlines to coordinate flights because it would hurt competitors like Virgin Australia. The competition watchdog said such an alliance would “likely lead to reduced competition” once international travel swings back into action if and when the COVID-19 pandemic subsides. It would be “to the detriment of passengers” travelling between Australia and Japan and did not pass the ACCC’s public benefits test.

The two airlines carried about 85 percent of passenger traffic between the two countries before the pandemic. They were the closest competitors on the Sydney to Tokyo route and the only airlines on the Melbourne to Tokyo route, according to the ACCC.

Qantas said it was disappointed with the decision to reject the alliance, which would have delivered more routes, better flight connections and benefits for frequent flyers. “This is particularly unfortunate for Queensland and Cairns, which would have benefited from a direct Qantas route to Tokyo that would have seen a lot of travellers wanting a premium experience,” Qantas domestic and international CEO Andrew David said.

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