Australia’s Qantas Airways (QAN.AX) told on Thursday it would buy the remaining 80% stake in Alliance Aviation Services (AQZ.AX) for A$610.8 million ($443.14 million) in an all-stock agreement to grow its footprint in the charter business.
Australian mining industry
The agreement will permit Qantas to incorporate Alliance’s charter fleet and “efficiently” serve customers in the Australian mining industry, as the complete reopening of international borders is anticipated to see an influx of workers and increased activity in the sector.
The resources sector continues to grow and any new tender for airline services will be very competitive. It makes a lot of sense for us to combine with Alliance to improve the services we can offer,” Qantas Chief Executive Officer Alan Joyce said.
Alliance investors will get A$4.75 apiece, a more than 35% premium to the stock’s last close and values the whole aviation services provider at A$764.5 million. In comparison, Qantas paid almost half of its current offer to purchase the initial 19.9% stake in Alliance in earlier 2019.
The transaction represents a compelling opportunity for our shareholders to exit the Alliance business following a time of significant industry upheaval, and to realize a strong return on Alliance’s fleet assets,” Alliance Chairman Steve Padgett told.
Alliance shares soared 26.5% to A$4.44, marking their largest intraday jump since May 2020, while Qantas edged lower.
- Alliance told in a separate announcement that its directors unanimously recommended the agreement.
Sydney-based Qantas said agreements already in place with Alliance would not be affected by the deal given the time it would require securing the approvals.
Also, read
- United Airlines to restart flights between Melbourne & San Francisco
- After 3 unsuccessful bids, Management sells its stake in Pawan Hans to the private consortium
- DGCA asks Air India to repair aircraft after passenger complains of shabby interiors
Qantas has notified the country’s competition watchdog of the deal along with details of the anticipated benefits to customers. The Australian Competition & Consumer Commission informed Reuters it had been contacted by Qantas and that it would “scrutinize the proposed acquisition very closely”.
The commission had investigated Qantas‘ 2019 stake buy in Alliance. Last month, it made no antitrust objections to the agreement but kept its door open for any further investigations.
Thank you
Stay updated aviationa2z.com
