Air New Zealand has decided to acquire an additional 3% of the shares of Virgin Australia and entered into an agreement with the later in that effect. The additional 3% will take Air New Zealand’ stake in Virgin Australia to 22.99%. The agreement, however, has to first pass the customary hurdles – approvals from the Foreign Investment Review Board (FIRB) and the Australian Competition and Consumer Commission (ACCC). Air New Zealand has already given the mandatory Substantial Shareholder Notice.
Air New Zealand may acquire an additional 3% stake in Virgin Australia, which is the limit that they are allowed to under the Australian Corporations Act. They have already made an application to FIRB in that regard.
In the normal process FIRB asks for the suggestion of the ACCC on any matters that are related with competition. On its turn the ACCC has mentioned Air New Zealand that it will be conducting public enquiries so that it can form a concrete opinion based on the suggested shareholding as wished by the airline.
Air New Zealand’s increased interest in Virgin Australia is an indication of the faith that the former has on the later and also gives away the strategy that John Borghetti and his team is pursuing at the moment.
Air New Zealand further states that it does not have any interests in gaining a controlling stake in Virgin Australia nor does it have any interests in having a position in the board of the later.