The Australian Competition and Consumer Commission (ACCC) has given the approval to Sydney Aviation Alliance (SAA) consortium’s proposed acquisition of Sydney Airport (SYD), conceding that it will pose minimal competition concerns.
While highlighting the country’s airports are ‘natural monopolies, with significant market power and no price regulation,’ the watchdog said that it will not oppose the $17.4bn (A$23.6bn) takeover bid from SAA.
This consortium, which includes IFM Investors, QSuper and AustralianSuper and Global Infrastructure Partners, has proposed to acquire shares of Sydney Airport Security holders at $6.47 (A$8.75) apiece.
The competition regulator consulted with airlines, service providers, retailer groups and industry bodies during the review and reached the conclusion that lessening of the competition from the proposed deal would not be substantial.
ACCC chair Rod Sims said: “Throughout our investigation, we heard that there is very little, if any, competition between Australian airports. 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.”
However, some stakeholders voiced concerns that the proposed deal could provide more bargaining power to airports against airlines and other airport users by adding to the flow of information between airports with common ownership.
Sims added: “We understand the stakeholder concerns. However, fundamentally, the lack of competition between airports means that any such sharing of information between airports would not amount to a substantial lessening of competition, which is what the law requires before we can oppose a merger.”
In another development, Adelaide Airport (ADL) opened a new international arrivals hall for passengers, marking the last phase of its $143m (A$200m) terminal expansion project.
On 18 November, the project was handed over to Adelaide Airport by builder BESIX Watpac.