News Brief
Sydney Airport
The Australian Competition and Consumer Commission (ACCC), the country's competition regulator, has approved the Sydney Aviation Alliance (SAA) consortium’s proposed of A$23.6 Billion (US$17.5 billion) acquisition of Sydney Airport.
Sydney Airport operates three passenger and seven cargo terminals in Sydney, and supplies a range of aeronautical services and facilities to airlines, retailers and other users.
Sydney Airport is listed on the Australian stock exchange and holds 100 per cent of Sydney (Kingsford Smith) Airport through its operating subsidiaries.
SAA, a consortium of investment funds that includes IFM Investors, QSuper, Australian Super and Global Infrastructure Partners, already have investments in a range of infrastructure assets, including shareholdings in other Australian airports. For instance, IFM already has stakes in nine airports across the country, including a more than 25% share in Melbourne and a 20% interest in Brisbane
In November, the board of Sydney Airport agreed to the buyout bid by SAA approving the offer to acquire shares at $6.47 (A$8.75) apiece.
“Throughout our investigation, we heard that there is very little, if any, competition between Australian airports,” ACCC Chair Rod Sims said.
“This is no surprise, as we’ve been saying for a long time that Australian airports such as Sydney Airport are natural monopolies, with significant market power and no price regulation.”
“The proposed acquisition is therefore unlikely to substantially lessen competition in a market that already has such little competition.” ACCC ruled.
While acknowledged that there will be some minimal potential for competition between airports in relation to some aeronautical services (for example when an international airline seeks to enter the Australian market), ACCC ruled that any lessening of competition from the proposed acquisition would not be substantial.
During its review process, the ACCC consulted with interested stakeholders including airlines, retailer groups, service providers and industry bodies. Some stakeholders raised concerns that the proposed acquisition may add to the flow of information between airports with common ownership, which could give airports more bargaining power against airlines and other users of airports.
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