Qantas Accepts Private Equity Offer

Australia's flag carrier Qantas today agreed to an acquisition by a private equity consortium for A$11.2 billion (about US$8.8 billion). The deal is expected to close as early as March, but must first gain regulatory approval and the favor of 90 percent of Qantas shareholders, whom the carrier's board of directors urged to follow suit.

After initial rejection, the consortium, dubbed Airlines Partners Australia, revised its offer and Qantas chairman Margaret Jackson today in Australia gave the nod to the deal, noting it would be more appealing to shareholders.

Jackson said the deal entails transitioning Qantas to a privately held company, of which Australians would have the majority stake. Jackson also noted that the carrier intends to maintain its current executive team.

Qantas is Australia's largest carrier and the 11th largest in the world, this year serving 34 million passengers to 142 destinations in 39 countries, investors said.

Airline Partners Australia includes Allco Equity Partners, Allco Finance Group, Macquarie Bank, Onex Corp., Texas Pacific Group and other investors.

"The foreign-based consortium members are experienced airline investors with a long-standing association with the industry," Jackson said in a statement. "The consortium members have made it clear to us that they recognize the immense value of the Qantas brand and intend to improve and grow the business."

On the board of the private equity player Allco-which is an aircraft leaser-are former British Airways chief executive Rod Eddington and former Cathay Pacific managing director David Turnbull. Texas Pacific Group, led by David Bonderman, has worked with Continental, America West and RyanAir. The group intends to expand Qantas both domestically and internationally and invest in new generation aircraft, including the A380 and B787.