The competition regulator will not opposeVirgin Australia Holdings Limited
(ASX:VAH) proposed 60 per cent acquisition of Tiger Airways.
The Australian Competition and Consumer Commission believes the union is unlikely to lead to a substantial lessening of competition in the Australian domestic travel market.
In justifying the decision, ACCC Chairman Rod Sims reasoned the fact Tiger Australia would have been highly unlikely to remain in the local market if the proposed acquisition didn’t proceed.
Virgin chief John Borghetti says the approval paves a real opportunity to provide competition in the budget travel segment, with Virgin set to buffer its local expertise to build a sustainable budget carrier.
The proposed transaction remains subject to certain conditions and regulatory approvals, including a nod from the Foreign Investment Review Board.
Virgin Australia generated a net profit of $23 million in the first half of fiscal 2013.
