One of the biggest corporate contracts in Australian history is one more step after the competition regulator gave it the green light.

Australia’s largest airport is approaching a landmark buyout after the competition regulator approved its $ 23.6 billion sale to a private equity consortium.

The Australian Competition and Consumer Commission said on Thursday it saw no reason to block the investor group’s purchase of Sydney Airport, as the monopoly nature of Australian air transport meant it there was little competition to erode.

The deal – which is set to be one of the largest in Australian corporate history – only needs foreign ownership approval, court approval and the blessing of shareholders of Sydney Airport.

The airport’s board of directors accepted the $ 23.6 billion offer in November after rejecting two previous offers.

Shareholders had previously been wary of an opportunistic takeover at a time when airport passenger numbers – and the share price – had been hit by the pandemic.

The company’s value almost halved when the coronavirus pandemic struck in early 2020 and international borders were closed to contain the spread. It has since retreated after vaccine developments boosted investor and consumer confidence.

ACCC Chairman Rod Sims said the regulator’s investigation found there was little, if any, competition among Australian airports, and therefore little to suggest that the landscape would be disadvantaged by the takeover.

“We have said for a long time that Australian airports such as Sydney Airport are natural monopolies, with significant market power and no price regulation,” Mr Sims said.

Among the group of buyers offered are the Australian Infrastructure Fund and Global Infrastructure Fund from IFM, AustralianSuper, QSuper and Global Infrastructure Partners.

Mr Sims said the ACCC has recognized that there is minimal potential for competition between airports in certain aviation services, for example when an international airline seeks to enter the Australian market or where airports are located close to each other.

However, taking into account the minimum level of such potential competition, any lessening of competition resulting from the proposed acquisition would not be substantial.

Sydney Airport shares last traded 2.8% at $ 8.585, just below the $ 8.75 per share cash offer made by the consortium.

Sydney Airport operates three passenger and seven cargo terminals and provides a range of aviation services and facilities to airlines, retailers and other users.

Read related topics:Sydney

Source link

About The Author

Related Posts