Australia's competition and consumer regulator approves Sydney Airport takeover
The Australian Competition and Consumer Commission (ACCC) has greenlighted the proposed $16.92 Billion (AU $23.6 Billion) takeover of Sydney International Airport (SYD).
In its analysis, the ACCC concluded that the transaction is unlikely to substantially lessen competition.
“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 ACCC took 45 days to review the acquisition proposal sent on October 7, 2021, by Sydney Aviation Alliance to acquire Sydney Airport. On December 9, 2021, the merger review’s outcome was declared “not opposed.”
“The ACCC maintains the view that the threat of regulation under the current limited monitoring regime does not constrain the pricing behaviour of our airports,” Sims said.
“The absence of constraint ultimately leads to consumers paying higher airport passenger charges than they otherwise would.”
“We will continue to advocate for a regulatory regime that is effective, particularly as the aviation industry and the Australian economy recover from the COVID-19 pandemic,” Sims said.
The ACCC looked closely at the cross-ownerships between Sydney, Melbourne, Brisbane, Perth and Adelaide airports.
However, as there is limited competition between Australian airports and the shareholdings were unlikely to give any one consortium member control at an Australian airport, the ACCC found that competition was unlikely to be impacted by the proposed acquisition in this respect.
SYD is Australia’s biggest airport operator. If the deal is completed, it will be one of Australia’s biggest ever buyouts.
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