Sydney Airport agrees to $23.6B buyout deal

Australia’s busiest and largest airport is set to change hands in a $23.6 billion deal, as the aviation sector continues to struggle under the burden of border closures.

ASX-listed Sydney Airport Holdings said in a statement on Monday it unanimously recommended the buyout offer from Sydney Aviation Alliance (SAA), comprised of Australian investors IFM Investors, QSuper, AustralianSuper and US-based Global Infrastructure Partners.

If completed, the deal will one of Australia’s biggest ever buyouts.

A scheme implementation deed had been made on Monday and a scheme meeting would take place in January, the company said.

It follows an earlier offer by SAA of $8.75 a share in September – six per cent higher than its first approach at $8.25 – which convinced the company’s board to give the consortium access to due diligence.

“The Sydney Airport Boards believe the outcome reflects appropriate long-term value for the airport, and unanimously recommend the proposal,” Chairman David Gonski said.

The deal is conditional on an independent expert’s report, approval from 75 per cent of the airport operator’s shareholders and a green light from competition regulators and the Foreign Investment Review Board, a process that could take months.

“We look forward to security holders voting on the proposed deal,” IFM Investors Chief Executive David Neal said in a statement on behalf of the consortium.

“Our alliance represents many millions of Australians … and we intend to work hard to bring more flights and passengers back to the airport as the aviation industry emerges from COVID-19.”

IFM Investors owns large stakes in airports in nine other Australian airports, including Brisbane and Melbourne.

The Australian Competition and Consumer Commission (ACCC) is investigating the transaction’s impact on competition, including the impact of the consortium’s ownership of multiple airports in the country. It is due to release its findings on December 16.

Sydney Airport’s board said that it plans to hold meetings about the deal in the first quarter of 2022.

The deal to buy Australia’s largest and only listed airport operator comes as the country this month eased its international border restrictions for the first since the beginning of the coronavirus pandemic.

From the start of November, fully vaccinated overseas visitors have been allowed to enter Australia’s two biggest states without the need for quarantine for the first time in more than a year and a half. Millions of Australians are also now able travel abroad freely.