Citilink (QG, Jakarta Soekarno-Hatta) and Indonesia AirAsia (QZ, Jakarta Soekarno-Hatta) have both dropped their respective plans to acquire Tigerair Mandala (Jakarta Soekarno-Hatta) the Indonesian press has reported.
Quoting unnamed sources close to the negotiations, the Jakarta Globe says Citilink pulled out when it came to the conclusion that acquiring the Tigerair (Singapore Changi) subsidiary would give it no competitive advantage over the opposition.
“Citilink has had a look at Mandala over the last few weeks and decided that a deal would not make any sense,” said one of the sources. “Acquiring Mandala will not improve Citilink’s network or give it an advantage against Lion Air (JT, Jakarta Soekarno-Hatta), the market leader.”
Similarly, AirAsia (AK, Kuala Lumpur International) told Reuters in a statement that it too had dropped its Tigerair Mandala designs and instead will instead pursue existing investments in the country which this year, will amount to more than USD300million.
"We would like to confirm that we evaluated to purchase Mandala. And after a long search have decided not to pursue this transaction," AirAsia Group Chief Executive Tony Fernandes told the newswire.
Amid difficult operating conditions, Tigerair Mandala has struggled to make an impact on the Indonesian market since its relaunch in 2012. The local press reports that both its parents, including Indonesia's private equity firm, Saratoga Capital, are eager to divest themselves of the venture before July 1.
It is uncertain whether or not a third unnamed prospective investor is still in talks with either party.
