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Australia allows Qantas bid to proceed

The Australian government agreed to allow an A$11.1 billion (US$8.8 billion) takeover bid for Qantas Airways yesterday after receiving assurances the airline would remain majority Australian owned.

Treasurer Peter Costello said the private consortium bidding for Qantas had agreed to a range of conditions designed to ease concerns about the future of the iconic Australian airline.

"In view of the undertakings they have made in this legally enforceable deed, I have concluded that there are no objections," said Costello, who could have vetoed the deal if he did not believe it was in the national interest.

Costello said Cabinet agreed to let the deal proceed yesterday after receiving a report from the Foreign Investment Review Board that it would not breach laws restricting offshore ownership in Qantas to 49 percent.

He said the consortium, Airline Partners Australia (APA), also agreed to keep maintenance and repair operations in Australia, retain the airline's frequent flyer program and continue regional services.

The airline's board has unanimously backed the A$5.60 a share bid from APA, which still needs approval from 90 percent of Qantas shareholders before it can proceed.
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