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Tue 24 Jul 2007 09:44 AM

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NZ airport deal subject to national interest test

New Zealand's government to look at whether Dubai's purchase of Auckland airport is in nation's best interests.

New Zealand’s government will look at whether Dubai’s proposed purchase of Auckland International Airport is in the nation’s best interests when deciding whether to approve the acquisition, the country’s finance minister said today.

“The ministers responsible for the decision will have to take into account the national benefit issues outlined in section 17 of the Overseas Investment Act which go well beyond the standard business test,” said Michael Cullen said in response to questions in parliament, reported Bloomberg.

“This is a decision to be taken by the ministers. It would not be a delegated decision to the Overseas Investment Office given the size and importance of the decision to be made.”

State-owned Dubai Aerospace Enterprise on Monday offered to pay up to $2.08 billion for a controlling stake in New Zealand main airport, which was backed by the airport's board.

Under the offer, which values the whole of Auckland Airport at $4.5 billion, a new company will be created, in which DAE will have a stake of 51 to 60%.

However, the deal is far from secured, with analysts speculating that a counter-offer could be on the cards and some MPs voicing opposition to the acquisition.

Foreign minister and leader of the New Zealand First Party Winston Peters has said the proposed sale is a "totally unnecessary sell out" and has urged shareholders to block the deal, according to Bloomberg.

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