Qantas Airways Limited · ASX:QAN
Qantas Airways — Merger or Acquisition (November 2002)
16 slides from Qantas Airways's merger presentation, Nov 25, 2002
Slide 1: ASX cover letter: Qantas/Air New Zealand Strategic Alliance
25-NOV-28H2 13:34 FROM GENERAL COUNSEL TO General Counsel Brett Johnson 25 November 2002 Companies Announcement Office Australian Stock Exchange Limited 20 Bridge Street Sydney NSW 2000 Facsimile: 1300 300 021 Dear Sir Qantas/Air New Zealand Strategic Alliance ASX Attached is a Presentation to Inves
Slide 2: Presentation to Investors: Strategic Alliance Overview
25-NOV-28H2 13:34 FROM GENERAL COUNSEL TO Presentation to Investors Qantas/Air New Zealand Strategic Alliance 25 November 2002 Overview & Establishment of a Strategic Alliance between Qantas and Air New Zealand m& Involves: + Qantas taking an equity investment in Air New Zealand of up to 22.5 percen
Slide 3: Overview and Rationale
25-NOV-28b2 13: 34 FROM GENERAL COUNSEL TO Overview t& Subject to Air New Zealand shareholder and regulatory approval k& Investment will be: + Funded from proceeds of equity raising undertaken in August 2002 * EPS accretive from 2003/04 onwards Rationale h& Alliance will: + Enable both Qantas and Ai
Slide 4: Scope of Alliance
25-NOV-28b2 13: FROM GENERAL COUNSEL TO Scope of Alliance b& Joint airline operations (JAQ) covers: * All of Air New Zealand network * All Qantas flying to, from and within New Zealand & Air New Zealand will not operate services within or beyond Australia (except SYD- LAX) Scope of Alliance b& Qanta
Slide 5: Benefits of Alliance
25-NOV-28H2 13:35 FROM GENERAL COUNSEL TO AGS P5716 Benefits of Alliance m& EPS accretive from 2003/04 onwards & Full scope of benefits will take up fo three years to be realised: + Resolution of alliance memberships * Implementation of JAO systems and schedules lb. Combined pre-tax synergies of bet
Slide 6: Benefits of Alliance
25-NOV-28b2 13: 35 FROM GENERAL COUNSEL TO Benefits of Alliance h&. Additional 22.5 percent share of Air New Zealand profit accrues to Qantas through shareholding Benefits of Alliance k& Reciprocal codeshare across the JAO networks h& Air New Zealand codeshare on non-JAO connecting Qantas sectors &
Slide 7: Benefits of Alliance
25-NOV-28H2 13:35 FROM GENERAL COUNSEL TO AGS P16 Benefits of Alliance b& Increased feed from Air New Zealand to Qantas non-JAQ services - Singapore, Los Angeles and Australian domestic ports h& Operational cost savings, primarily from cost of sale reductions and mix/usage of aircraft types h& Acces
Slide 8: Investment in Air New Zealand: Steps One and Two
25-NOV-28H2 13:35 FROM GENERAL COUNSEL TO ASS =P. 816 Investment in Air New Zealand h. STEP ONE: Subscription for Convertible Notes equal to 4.99 percent equity interest in Air New Zealand + Issued at 10 percent discount to VWAP for 20 day period up to and including 20 November 2002, equal to NZ$0.4
Slide 9: Investment in Air New Zealand: Step Three
25-NOV-28b2 13: 36 FROM GENERAL COUNSEL TO Investment in Air New Zealand b& STEP THREE: Issue of shares to take total investment to 22.5 percent b& To occur either: + Atsame time as 15 percent stake taken. Shares would be issued at same price as Notes * Three years after 15 percent stake taken. Shar
Slide 10: Board Representation
25-NOV-28b2 13: 36 FROM GENERAL COUNSEL TO Board Representation b& Qantas entitled to nominate two directors to Air New Zealand Board: * One nomination under Strategic Alliance Agreement + Further nomination when equity holding above 10 percent to maintain proportionate representation Board Represen
Slide 11: Administration of JAO networks
25-NOV-28b2 13: 36 FROM GENERAL COUNSEL TO Administration of JAO networks & Commercial aspects of JAO networks to be managed by Air New Zealand bk. Management role effective upon reciprocal codesharing on the JAO networks b& Air New Zealand to coordinate management until this is effected k& Qantas t
Slide 12: Administration of JAO networks; Accounting for Investment
25-NOV-28H2 13:36 FROM GENERAL COUNSEL TO AGS =P 12/16 Adrninistration of JAO networks k& Matters not resolved by SAAG enter defined escalation process h& Initial term of five years from resolution of alliance memberships Accounting for Investment & The Convertible Notes will be accounted for as an
Slide 13: Accounting for Investment and Conclusion
25-NOV-28H2 13:36 FROM GENERAL COUNSEL TO Accounting for Investment b& Qantas share of Air New Zealand net profit will be taken to account each period, adjusted for accounting policy differences and goodwill amortisation b& Goodwill will be amortised over a period of up to 20 years Conclusion lk Ast
Slide 14: Appendice: Regulatory Approvals Required
25-NOV-28b2 13: 3? FROM GENERAL COUNSEL TO Appendice Regulatory Approvals Required h& Kiwi Shareholder (Minister of Transport) approval required for Qantas to acquire any shares in Air New Zealand and for amendments to the Air New Zealand Constitution b&& Approval expected by end of 2002 ASX P.14-16
Slide 15: Regulatory Approvals Required
25-NOV-28H2 13:37 FROM GENERAL COUNSEL TO Regulatory Approvals Required h& Application to the Australian Competition and Consumer Commission (ACCC) and the New Zealand Commerce Commission (NZGC) to authorise: - Equity subscription + Strategic Alliance (price and schedule coordination) bs. Final dete
Slide 16: Regulatory Approvals Required
25-NOV-28H2 13:37 FROM GENERAL COUNSEL TO Regulatory Approvals Required b& Shareholder approval (including Govemment/Treasurer approval) for. Acquisition of more than 10 percent of Air New Zealand (under NZSE Listing Rules) Acquisition of more than 20 percent of Air New Zealand (under Takeovers Code
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