Saudi PIF and Ardian to buy 25% stake in Heathrow airport for £2.4bn

Saudi Arabia’s sovereign wealth fund is taking a GBP1b stake in London’s Heathrow airport as the infrastructure group Ferrovial offloads shares in the UK travel hub it has owned for 17 years. Ferrovial, which shifted its head office from Madrid to Amsterdam this year, late on Tuesday said it was selling its 25% stake in the airport’s parent company for GBP2.4b. In the transaction, Saudi Arabia’s Public Investment Fund will acquire 10% of the shares in the company and Ardian, one of Europe’s largest private equity groups, will purchase 15%. The deal marks the end of a chapter for Heathrow that began amid drama and controversy in 2006 when Ferrovial launched a successful hostile bid for BAA, the UK airports operator. More recently Ferrovial executives had privately grown frustrated at the regulatory landscape after Heathrow was forced to cut its landing charges by almost a fifth following a bitter dispute with its airline customers. The airport has remained lossmaking this year partly because of the higher cost of servicing its significant debt burden following rises in interest rates. Luke Bugeja, CE of Ferrovial Airports, said the company had helped to transform Heathrow, “overseeing an investment of £12bn, expanding its capacity with the construction of Terminal 2, and improving its operational performance”. The group’s initial Heathrow stake was 56% but it had reduced it to 25% by 2013.<br/>