Regulator clears Qantas takeover

2nd Mar 2007

Despite concerns raised by airlines and airports, Australia’s competition regulator has ruled the Macquarie Bank-led $A11.1 billion takeover of Qantas would not unfairly disadvantage rival carriers.“The proposed acquisition is unlikely to substantially lessen
competition under section 50 of the Trade Practices Act 1974,” ACCC
chairman Graeme Samuel said.

The commission only rejected the concerns after considering several detailed scenarios raised in submissions, claiming the deal could allow Macquarie Bank to influence Sydney Airport to favour Qantas at the expense of rivals.

While the Australian Competition and Consumer Commission found there were constraints on Macquarie Bank’s abilities to wield such influence, it noted strong financial incentives for Sydney Airport to favour Qantas with or without the transaction going ahead.

The decision leaves a Foreign Investment Review Board review, which is investigating the foreign ownership levels of Airline Partners Australia - the consortium backed by Macquarie Bank - as the only regulatory hurdle facing the private equity takeover bid.

However, in a concession to a loose alliance of groups concerned about the implications of the takeover, the Federal Government did agree to look at a parliamentary bill aimed at preventing the sale of low-cost airline Jetstar to overseas investors.




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