The ACCC will not oppose the proposed acquisition by Virgin of 60% of Tiger Airways.
A determining factor in the ACCC’s decision not to oppose the proposed acquisition was the conclusion reached that Tiger would be highly unlikely to remain in the local market if the proposed acquisition didn’t proceed. In its press release, the ACCC stated that in reaching its conclusion, it “had particular regard to Tiger Australia’s history of poor financial and operational performance. In six years in Australia, Tiger has never made an operating profit, and its current losses are large.” After investigating the likelihood of Tiger’s performance being improved by either its current owner (the Singapore-based Tiger Airways Holdings Limited) or other potential shareholders or joint venture partners if the proposed acquisition did not proceed, the ACCC concluded that it would be unlikely that Tiger would be turned around under any of these scenarios to provide vigorous competition as an independent operator. ACCC Chairman Rod Sims stated:
“..We concluded that it was highly likely that Tiger Australia would leave the market if this acquisition didn’t go ahead, and accordingly blocking the acquisition would not serve to protect competition.”
A Public Competition Assessment will be published in due course.