Australian regulator won’t stop Air NZ lifting Virgin stake
Sept. 5 (BusinessDesk) - The Australian Competition and Consumer Commission won’t stop national carrier Air New Zealand from lifting its stake in Virgin Australia, two days after extending their airlines’ trans-Tasman alliance.
The Australian antitrust regulator said it won’t oppose Air NZ’s proposal to lift its investment in Virgin to as much as 26 percent, the ACCC said in a statement. The New Zealand airline spent A$72 million to increase its Virgin stake to 23 percent in June in a series of off-market transactions, and said it might creep higher to about 26 percent.
“The ACCC concluded that the proposed acquisition would not be likely to result in a substantial lessening of competition in any market as it would not provide Air New Zealand with the ability to control or materially influence Virgin or significantly affect Air New Zealand’s incentives to compete with Virgin,” commissioner Jill Walker said.
Air New Zealand has spent about A$273.6 million since it first took a 15 percent stake in Virgin two years ago, including a top-up last year to hold its then-stake at 19.99 percent. Virgin’s shares last traded at 42 Australian cents on the ASX, valuing Air New Zealand’s stake at about A$246.3 million.
Air New Zealand’s shares gained 0.4 percent to $1.415 today, and have climbed 8.9 percent this year.