Sydney Airport, Australia’s biggest and busiest airport, could soon change hands, thanks to the huge losses brought by the COVID-19 pandemic and border closures.
The airport has accepted an AU$23.6 billion (US$ 17.5 billion) bid with an international consortium, which plans to buy 100 percent shares of the Airport, according to an announcement to the Australian Securities Exchange (ASX) on Monday.
The consortium is called Sydney Aviation Alliance (SAA), which comprises a group of Australian infrastructure and international investment funds, including IFM’s Australian Infrastructure Fund, U.S. based Global Infrastructure Fund, AustralianSuper, and QSuper.
“Today’s announcement is the culmination of months of engagement between all parties,” Sydney Airport chairman David Gonski said.
“The Sydney Airport Boards believe the outcome reflects appropriate long-term value for the airport, and unanimously recommend the proposal to security holders, subject to customary conditions such as independent expert approval and no superior proposal.”
The deal comes after a four-month bargaining process between the two parties. The shareholders of the airport accepted a final price of $8.75 per share, after rejecting two earlier proposals for $8.25 and $8.45 per share, respectively.
Shares in the company rose by 2.8 percent to $8.46 on the ASX on Monday after the announcement.
The deal will be one of Australia’s biggest acquisitions if completed, although a few steps are still needed, including an independent report on the takeover, approval from Australian regulators, and approval from three quarters of the shareholders.
Assuming that no better deal will be offered from another party, the airport’s boards have unanimously suggested its security holders to accept the bid at the planned meeting in the first quarter of 2022 to vote on the sale.
Sydney airport announced in August a net loss of AU $97.4m for the first half year which has been attributed to travel restrictions surrounding Australia’s international border.
Australia has adopted a hard border-closure policy since the pandemic started.
The restriction on Australians flying out of the country have also been lifted on Nov. 1.
Sydney’s second international airport is currently under construction, with the new airport at Badgerys Creek expected to open in 2026.