Seven years after trying to win control of Air Canada and Canadian Airlines, Gerry Schwartz and his Onex Corp. finally have their airline — but one with a kangaroo on the tail, not a maple leaf.

Qantas Airways CEO Geoff Dixon, left, chairman Margaret Jackson and Bob Mansfield, director of Airline Partners Australia consortium, beam after announcing the takeover in Sydney Thursday.
(Paul Miller/Associated Press)

On Thursday, Qantas Airways, Australia's biggest carrier and the 11th biggest airline in the world, agreed to be taken over by a group that includes Toronto-based Onex.

The takeover — worth about $10.2 billion — must still be approved by the airline's shareholders, but Qantas's board of directors are recommending acceptance.

Publicly traded Onex Corp. will pick up a 12.5-per-cent stake by investing $162 million from itself and $404 million through its private fund Onex Partners.

Australian finance company Allco will wind up with 46 per cent of Qantas, while Australia's Macquarie Bank will hold about 15 per cent. U.S. investment firm Texas Pacific Group will also get a 15-per-cent stake. Foreign investors will hold the remainder of the company.

Rules set out when Qantas was privatized in 1995 prevent individual foreign investors from owning more than 25 per cent of the airline, and Australians must retain majority control of the company.

Australian Prime Minister John Howard said his government will keep an eye on the takeover, but said they're not going to take sides.

"I hope the Qantas we know is the Qantas we keep," he said. "People like Qantas; it is an icon."

The Qantas venture is not Onex's first venture into the airline industry. The company's highest-profile foray took place in 1999, when it tried unsuccessfully to take over and merge Air Canada and Canadian Airlines.

Onex has also been rumoured to be among the bidders for Raytheon Co.'s aircraft division, which builds Beechcraft light planes and Hawker business jets

With files from the Associated Press