Sydney Aviation's deal to buy Sydney Airport (ASX:SYD) gets ACCC nod

Company News

by Melissa Darmawan

The Australian Competition & Consumer Commission (ACCC) has paved the way for Sydney Aviation Alliance’s proposed $23.6 billion proposal to buy Sydney Airport (ASX:SYD).

Sydney Airport Alliance is a consortium of asset managers which comprises of the likes of AustralianSuper, QSuper players, and IFM who already have its paws in other airport assets.

The competition watchdog said that there was very little competition between the airports, and for some time, and by no surprise said that flight bases like Sydney Airport have been natural monopolies with “significant market power and no price regulation”.

The ACCC embarked on consulting stakeholders including airlines, retailer groups, service providers and industry bodies. Through its review, there were some concerns raised that the merger might pose a threat to airports with common ownership via information flow. That means it could give airports further negotiating power against airlines and other users of airports.

Meanwhile, market participants told the competition watchdog that the current monitoring regime had not been effective in holding back Sydney Airport’s ability to charging excessive prices.

Shares in Sydney Airport (ASX:SYD) is trading 2.8 per cent higher at $8.58.

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