AirAsia to buy Indonesia’s Batavia Air for $80 million
Source:AFP Published: 2012-7-27 0:10:04
AirAsia said Thursday it will buy Indonesia's Batavia Air for $80 million, as the region's biggest budget carrier spreads its wings in Southeast Asia's largest economy.
The Malaysia-based airline expects to complete the acquisition, which is subject to Indonesian regulatory approval, by the second quarter of next year as it moves to bolster its presence against fast-growing rivals.
In order to comply with Indonesian ownership law, AirAsia said it will hold 49 percent of Batavia, while 51 percent will be held by its Indonesian unit, Fersindo.
AirAsia chief Tony Fernandes, who recently announced he was moving to Jakarta to oversee the airline's regional expansion, described the acquisition as a "fantastic opportunity."
He said it would "accelerate our growth plans in one of the most exciting aviation markets in Asia and further underlines our belief in the growth potential of Indonesia's aviation sector."
Demand for air travel in Indonesia, an archipelago of more than 17,000 islands with a growing middle class among its 240 million population, has been soaring.
The purchase will be carried out in two stages, with the acquisition of a majority 76.95 percent stake to be followed by the remaining 23.05 percent held by its existing shareholders, AirAsia said in a statement.
"The total purchasing consideration for Metro Batavia Group is $80 million and will be settled in cash," the statement added.
The carrier has been shoring up its presence in the region against a host of other competitors, including Lion Air.