Air New Zealand Gets Green Signal for Increasing its Stake in Virgin Australia
The Australian Competition and Consumer Commission have permitted Air New Zealand to increase its stake in Virgin Australia to 25%.
Virgin Australia is second biggest airline in Australia. At present, Air New Zealand's stake in this airline is 19%. After lifting the stake by 6% the company will have a total of 25.9% stake in Virgin Australia.
However, before final purchasing of the stake, Air New Zealand will have to take a go ahead permission from the Foreign Investment Review Board. The company had applied for lifting its stake in June with a reason that since its voting power in Australian airline had increased to 22.9% under the takeover provisions, it was allowed for 3% stake increment after every six months.
In June, the Kiwi Airline had spent an amount of $ 72 million for raising its stake in Virgin to 23%, at that time only it had said that it might think about 26% increase in shareholding.
"The proposed acquisition would not be likely to result in a substantial lessening of competition in any market, as it would not provide Air New Zealand with the ability to control or materially influence Virgin or significantly affect Air New Zealand's incentives to compete with Virgin," said ACCC Commissioner Jill Walker.
The company had recently received the extension of trans-Tasman alliance by the ACCC. The news brought Virgin Australia's share down to 42 cents.
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