Virgin Australia Bid for Skywest Cleared by RegulatorDavid Fickling
Virgin Australia Holdings Ltd., the nation’s second largest carrier, was cleared by the antitrust regulator to proceed with its takeover of Skywest Airlines Ltd. for about A$96 million ($100 million).
The deal probably won’t lead to a “substantial lessening of competition” as the airlines have only one route that overlaps with each other, the Australian Competition and Consumer Commission said in a statement today. A ruling on Virgin’s bid for control of the local unit of budget carrier Tiger Airways Holdings Ltd. will be released Feb. 7, it said.
The Skywest approval will allow Virgin to take control of its regional routes and advance plans to take on Qantas Airways Ltd., which has a 65 percent share of the Australian domestic market.
“The message that we received from the market was broadly supportive of the proposed acquisition,” ACCC Chairman Rod Sims said in a statement. “The services that Virgin and Skywest supply are seen as largely complementary, rather than competitive with each other.”
Virgin’s cash and stock-based offer values Skywest shares at 45 Australian cents.