Consortium of Investors in $8.75 Billion Acquisition of Qantas

December 14, 2006

Cleary Gottlieb is representing a consortium of investors, including funds controlled by long-standing client Texas Pacific Group; Canadian private equity group, Onex Corporation; Australian infrastructure fund, Allco Finance and Macquarie Bank Limited, in their proposed acquisition of Qantas Airways Limited. We are also advising the consortium on the financing of the acquisition.

The A$11.1 billion ($8.75 billion) acquisition of the Australian flagship carrier, which is one of the world’s most profitable airlines, is by far the largest such transaction in Australian history and one of the largest ever aviation deals globally. Valuing Qantas at A$5.60 per share, the deal represents a premium of 33% over Qantas’ closing share price on November 6, 2006, the day before speculation about the offer began.

The proposed acquisition of the world’s second oldest airline has presented a unique and complex set of structural and regulatory challenges. Ownership of Qantas (which was privatized in 1993) is governed by the Qantas Sale Act, under which foreign ownership is capped at 49.9%, with no single investor permitted to own more than 25%. In addition, under the Foreign Acquisitions and Takeovers Act, any foreign holding in excess of 14.9% or aggregate foreign voting power of 40% or more requires the approval of Australia’s Foreign Investment Review Board, which has the power to block a takeover on national interest grounds. Separately, under the Airports Act, Macquarie’s stake is limited to 15% due to its holding in Sydney Airport.