Qantas share price takes a dive amid more takeover delays

The Qantas Airways Limited (ASX: QAN) share price is descending on Monday morning.

At the time of writing, the airline operator’s shares are down 3% to $6.27.

Why is the Qantas share price falling?

Today’s weakness in the Qantas share price appears to have been driven by concerns over its proposed acquisition of Alliance Aviation Services Ltd (ASX: AQZ).

Alliance is Australasia’s leading provider of contract, charter, and allied aviation and maintenance services. It provides essential services to mining, energy, and government sectors as well as wet lease services for other airlines.

In May last year, Qantas announced an agreement with Alliance to acquire the remaining 80% stake that it does not already own in an all-scrip deal. At the time, the Qantas share price was trading at $4.75 per share, which valued the 80% stake at $614 million.

Qantas CEO, Alan Joyce, believed that “acquiring the remaining shares in Alliance would mean QantasLink can better compete in the highly competitive charter segment, particularly given the shared fleet type of Fokker aircraft.”

What’s the latest?

This morning, Alliance revealed that the Australian Competition & Consumer Commission (ACCC) has informed it that it will further delay its review of the proposed scheme of arrangement until 20 April 2023.

The market appears to believe that this could be a sign that the ACCC has concerns with the potential acquisition, casting doubts over the deal.

Given that Qantas expects it to be earnings per share accretive, it would be a blow if it didn’t go through. But certainly not the end of the world for the airline operator.

Investors will have to sit tight and wait to see what the ACCC announces this time next month.

The post Qantas share price takes a dive amid more takeover delays appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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