Qantas scraps $614m Alliance takeover after competition watchdog rejection

Qantas has officially terminated its planned takeover of fly-in, fly-out charter service Alliance Aviation six months after the competition watchdog opposed the deal. The two ASX-listed airline businesses told the market on Thursday the $614m deal was no longer worth pursuing as it would require expensive legal action to attempt to get over the line. Qantas will retain its 20% stake in the smaller charter airline. The Australian Competition and Consumer Commission opposed the transaction in April after a lengthy investigation which determined the level of competition on routes in regional and remote areas of Australia needed to be strengthened. The call followed four delays by the commission, which first received the proposed acquisition application in April 2022. Alliance told investors on Thursday the termination was in their best interest. “Continuing to seek competition clearance for the transaction would require the company to apply significant additional resources to extensive and complex contested court proceedings,” Alliance said. Qantas has owned a 20% stake in the Brisbane operation since 2019 and moved in April 2022 to purchase the remaining 80% in a deal in which Alliance shareholders receive Qantas shares worth $4.75 for each Alliance share they hold. Regional Express’ $48m takeover of fly-in, fly-out operator National Jet Express was approved in September 2022, less than two weeks after it flagged the proposed deal. Although Rex’s acquisition was approved, the ACCC has cracked down on the level of competition and collaboration between airlines since COVID-19, with the Alliance takeover one of a string of joint-airline rejections this year.<br/>