Air NZ acquires stake in Virgin Blue
Air New Zealand has acquired a substantial shareholding in Australian-based airline, Virgin Blue. The national carrier said that while it has no intention of launching a takeover bid for the Sir Richard Branson-founded airline, it will have a shareholding between 10% and 14.99%.
Air New Zealand Chief Executive Officer Rob Fyfe said he confirmed his carrier’s intentions in a phone call to the Australian airline’s Chief Executive, John Borghetti, yesterday.
Air New Zealand has obtained Australian Foreign Investment Review Board approval to purchase up to 14.99% percent of Virgin Blue; a shareholding which it believes will keep the total foreign ownership of Virgin Blue within the statutory limit of 49%. Virgin Group based in the UK has a 26% shareholding.
“The investment in Virgin Blue is part of Air New Zealand’s strategy to develop scale and reach in this region. The Tasman alliance with Virgin Blue was the first step in this strategy. This investment cements the emerging relationship between our two airlines and demonstrates the confidence we have in Virgin Blue both as an entity and as a partner for Air New Zealand,” said Fyfe.
Fyfe also said that Air New Zealand will not be seeking representation on the Virgin Blue Board for at least six months and that any representation would be a decision for the Virgin Blue Board and shareholders.
Air New Zealand’s Chief Financial Officer Rob McDonald says the cost of entry into Virgin Blue is AU$145 million (US$145 million), or 44 cents per share.