ANZ will acquire the half interest in Ansett that it blocked Singapore Airlines (SIA) from buying last year. The New Zealand carrier has agreed to pay News Corp between A$500 million ($315 million) and A$600 million for the Ansett stake - more than the A$500 SIA had agreed to pay, but less than the A$1 billion Rupert Murdoch, News Corp's owner, declared in November that Ansett is worth.
Several factors brought ANZ and News Corp to the table in earnest. Ansett's fleet and growth plans were shelved because of uncertainty over its future ownership. That indecision partly explains Ansett's fall in half-year operating profit to A$84.3 million from A$110.5 million one year ago.
A plan by Ansett's staff to buy the airline's other half in a campaign modelled on United Airlines' employee buy-in also promised the potential for more labour-management conflict. ANZ clearly did not relish the prospect of sharing ownership and control with a group of unions.
But Virgin's plans to enter the Australian market with a low-cost start-up was the clincher. News Corp realised its stake in Ansett would probably shed more value and ANZ realised that it needed to bolster its Australian position to face this new competition.
ANZ's takeover will bring change to Ansett. Most corporate affairs will move to Auckland, where the new parent will make some long-delayed decisions on fleet and route planning.
ANZ is unlikely to change Ansett's brand and may substitute Ansett International flights from Australia for some of its own because Australians identify more closely with Ansett than ANZ.
But ownership issues remain. SIA lost interest in Ansett after its bid was thwarted last June, but it could re-enter the game by buying a stake in ANZ. That was ANZ's hope when it blocked SIA's bid for Ansett and ANZ is encouraging SIA to consider that option.
Whether SIA is interested will turn on what it decides about joining Virgin in its Australian venture. It has already taken a 49% stake in Virgin Atlantic.
It would make little sense for SIA to take positions in both Virgin and ANZ. While ANZ's purchase of Ansett pins down one piece of the puzzle, the final ownership picture in Australasia's skies remains unclear.
News Corp sells Ansett NZ
News Corporation, in an attempt to offload airline interests in Australia and New Zealand, has agreed to sell Ansett New Zealand to a group of local investors led by David Belcher, a principal with Auckland investment bankers, Clavell Capital.
According to New Zealand reports, the parties have agreed a price of NZ$42 million ($21 million), subject to due diligence. News Corp and Clavell refuse to confirm their agreement, but Ansett New Zealand does not deny reports of an imminent sale. However, it is likely that any proposed deal could take up to three months to complete.
Source: Airline Business
