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Sydney Airport sale pushes ahead after FIRB approval

written by Hannah Dowling | December 23, 2021

The Australian Foreign Investment Review Board has given its approval of the $23.6 billion takeover bid for Sydney Airport by a consortium of super funds and global investment partners.

Sydney Airport announced on Wednesday that the FIRB had provided a “no objection” letter to its proposed $23.6 billion takeover by the Sydney Aviation Alliance (SAA) – a consortium of super funds, led by IFM Investors, along with QSuper, Global Infrastructure Partners and AustralianSuper.

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The airport said that all regulatory conditions under the scheme implementation deed between it and the consortium, which includes FIRB, the ACCC and European Union merger controls, “are now satisfied”.

It comes just two weeks after the Australian Competition and Consumer Commission similarly green lit the deal, which marks one of the largest corporate takeovers in Australian history.

However, the airport board still needs to secure the support of at least 75 per cent of its shareholders before the deal can be finalised. A vote is scheduled for 3 February.

The board has continued to unanimously recommend that Sydney Airport securityholders vote in favour of the takeover, which would see them each walk away with $8.75 per share.

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The consortium has been eyeing to secure a sale of the airport since July, when it put forward a $22 billion takeover bid to the airport’s operators – or $8.25 per share – which the board quickly snubbed as “opportunistic”.

The consortium then in August raised its bid up to $22.8 billion, or $8.45 per share, which was again swiftly rejected, causing the super funds to threaten to leave the negotiation table altogether.

However, SAA ultimately came back with a final offer of $23.6 billion, equating to $8.75 per share.

The news comes after Sydney Airport reported a $97.4 million half-year loss in the six months to 30 June 2021.

However, conditions are improving at the airport, following a massive surge in thoroughfare in November, when both domestic and international borders began to ease.

Sydney saw a total of 498,000 passengers through the airport over the month of November, a dramatic increase from the 65,000 passengers seen in October.

The drastic surge in passenger figures is largely due to the fact that the states of NSW, Victoria and the ACT all reopened their international borders to Australian citizens and residents with no quarantine from 1 November, while state border closures eased gradually over the month.

In November, Sydney welcomed over 407,000 domestic travellers, up a whopping 785 per cent compared to the 46,000 domestic passengers it saw in October.

Meanwhile, over 91,000 international travellers passed through Sydney Airport in November, up 379 per cent from October’s figure of 19,000.

While the numbers represent a strong uptick in the short-term, passenger thoroughfare remains heavily subdued.

Overall passenger numbers in November are still 86.7 per cent below pre-COVID numbers, while international passenger figures are down 93.3 per cent from 2019 levels.

2 Comments

  • Jim Wright

    says:

    What will be the value of Sydney Airport when the new one opens and competition commences. Will it be land value only?

  • Robert Allcock

    says:

    Hi Hanna,the opportunistic grab for !SYD. is exactly that ! I have held shares in the company since it was Macquarrie , and gone through thick and thin with them. How many of these super fund hero,s will be paying C.G.T. on their proceeds? Its not even their bloody money! who influenced the FIRB in their decision? Too many questions not being answered here! So much for limp wristed public servants supposedly watching unfolding of events. Check the money trail Hanna!
    Covid and wars won,t last forever, Sydney Airport shares will pick up ! Talk to you in two years time ,if I,m wrong , lets see!

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