The 86-year old Australian carrier Qantas, which yesterday rejected an $8.6-billion (A$10.9 billion) takeover bid from a consortium led by Macquarie Bank, made last month, today accepted a sweetened $8.7-billion (A$11.1 billion) offer, for which Macquarie Bank Ltd, Australia's biggest investment bank, has roped in the Texas Pacific Group.

The deal materialised after the initial rejection because the acquirers dropped some their earlier demands, including a break fee if the deal fell through. With the conditions being dropped, the deal was settled at $5.60 a share, just 24 hours after Qantas turned down the first offer of $5.50.

Moreover, the consortium has pledged not to cut back on unprofitable routes or divest the two airports that Qantas owns or outsource some 6,000 maintenance jobs to low-wage countries like India and China - an emotive issue with Labour politicians and labour unions.

Qantas is one of the few global airlines that continues to be profitable despite being hit by rising fuel and other costs.

The takeover is subject to regulatory approvals and shareholders' consent. The Qantas board has unanimously recommended that shareholders accept A$5.60.

The new owners of the airline, once the transaction is completed will be Macquarie Bank, Australian finance company Allco, US firm private equity firm Texas Pacific Group, and Canada's Onex.

In order to meet the Qantas ownership rules set by the government, which prohibit a stake holding over 25 per cent by any single investor, and which restrict foreign shareholding to 49 per cent (foreign airlines can hold only up to 35 per cent), the deal has been structured to comply with the laws.

Once the transaction has been completed, Allco's stake in the consortium will be 46 per cent, while Macquarie and Texas Pacific will have 15 per cent each, and Onex 9 per cent. Some  unspecified investors will hold the remaining 15 per cent. Texas Pacific and Onex have a focus on the aviation sector.

The takeover consortium plans to de-list the airline and take it private, but the current management team will stay in place along with the growth and cost-saving strategy that it is currently pursuing to reduce costs by $3-billion.

Qantas has a strong grip on the airline-dependent country, where many of the largest centres are hundreds of kilometres apart. The investors' group is banking on this and hopes to expand Jetstar, the carrier's low-cost subsidiary, to cover international routes.