ACCC approves mammoth $23.6b private equity takeover of Sydney Airport

One of the biggest corporate deals in Australian history is a step closer after the competition regulator gave it the green light.

Australia’s biggest airport is a step closer to an historic buyout after the competition regulator approved its $23.6b sale to a private equity consortium.

The Australian Competition and Consumer Commission on Thursday said it saw no reason to block the purchase of Sydney Airport by the group of investors, as the monopolistic nature of Australian air travel meant there was little competition to be eroded.

The deal – which set to be one of the biggest in Australia’s corporate history – only needs foreign ownership approval, court approval, and the blessing of Sydney Airport shareholders to proceed.

Sydney Airport hareholders had previously been wary of an opportunistic takeover at a time when the airport’s passenger numbers – and share price – had been battered by the pandemic. Picture: NCA NewsWire / Flavio Brancaleone

The airport’s board had accepted the $23.6b bid in November after knocking two previous bids.

Shareholders had previously been wary of an opportunistic takeover at a time when the airport’s passenger numbers – and share price – had been battered by the pandemic.

The company nearly halved in value as the coronavirus pandemic hit in early 2020 and international borders were slammed shut to contain the spread. It has since crawled back after vaccine developments boosted confidence among investors and consumers.

ACCC chair Rod Sims said the regulator’s investigation found there was little – if any – competition between Australian airports, and therefore little to suggest the landscape would be disadvantaged by the takeover.

Sydney Airport operates three passenger and seven cargo terminals and supplies a range of aeronautical services and facilities to airlines, retailers and other users. Picture: NCA NewsWire / Christian Gilles

“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,” Mr Sims said.

Among the proposed group of buyers are IFM’s Australian Infrastructure Fund and Global Infrastructure Fund, AustralianSuper, QSuper, and Global Infrastructure Partners.

Mr Sims said the ACCC accepted there was 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 or when airports are located close to one another.

However, taking into account the minimal level of this potential competition, any lessening of competition from the proposed acquisition would not be substantial.

The Australian Competition and Consumer Commission on Thursday said it saw no reason to block the purchase of Sydney Airport by a group of investors. Picture: NCA NewsWire / Christian Gilles

Shares in Sydney Airport were last trading 2.8 per cent higher at $8.585, just under the $8.75 per share cash offer made by the consortium.

Sydney Airport operates three passenger and seven cargo terminals and supplies a range of aeronautical services and facilities to airlines, retailers and other users.