Qantas has agreed to buy the ASX-listed fly-in, fly-out charter operator Alliance Aviation, setting up a likely fight with the competition regulator and its rival Virgin Australia.
The airline said on Thursday morning it would issue $614 million worth of new shares to fund the all-scrip deal, which will see shareholders receive $4.75 worth of Qantas shares for each Alliance share they hold, which closed at $3.51 on Wednesday.
Qantas bought a 19.9 per cent stake in Alliance in 2019, prompting a furious response from the ACCC because it is a direct competitor and also operated flights on behalf of Virgin under a “wet lease” arrangement.Credit:Steven Siewert
Alliance said the deal had a 35 per cent premium for shareholders, valuing the company’s equity at $764.5 million and with an enterprise value (including debt) of $919.2 million.
Qantas bought a 19.9 per cent stake in Alliance in 2019, prompting a furious response from the Australian Competition and Consumer Commission because it is a direct competitor and also operated flights on behalf of Virgin under a “wet lease” arrangement.
The ACCC ended its investigation last month, without taking action against either company.
Alliance has a fleet of 70 jets and is the biggest provider of fly-in, fly-out (FIFO) charter services to Australia’s mining sector, and also operates services on behalf of Qantas and Virgin. It also flies regulator passenger flights on a handful of regional routes.
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