Why Saudi Arabia and private equity have landed stakes in Heathrow
As Heathrow prepares for its rush of Christmas travellers, Europe’s busiest airport is embarking on a big shake-up of its ownership as Saudi Arabia’s Public Investment Fund and private equity firm Ardian take control of a chunk of the business. At the end of last month, Spanish infrastructure group Ferrovial announced it would sell its remaining 25% stake in Heathrow to Saudi Arabia’s PIF and French buyout group Ardian for GBP2.4b. But the deal has also raised the prospect that the two new shareholders could increase their stakes further. As part of the terms of Heathrow’s ownership structure, the other shareholders, including Canadian and Australian pension funds, the Qatar Investment Authority and the China Investment Corporation, have the right to sell their stakes to the PIF and Ardian at the same price. The price Ferrovial achieved — which valued the airport’s equity at GBP9.5b, with an enterprise value of just under GBP26b — was seen as “very attractive” by some of the other shareholders and at least one of them would consider selling, according to a person familiar with their thinking. But the person added there was no guarantee that the PIF or Ardian would agree to up their stakes. The two new investors are focused on the current deal — which will require approval from UK competition authorities — and there have been no talks with other shareholders yet, according to another person familiar with the deal. The PIF, which has more than $700bn of assets, is focused on generating a return from the 10% stake it is buying, according to a person familiar with the fund’s decision. But at the same time, Saudi Arabia is making a concerted push into aviation and tourism to try to reduce its reliance on oil revenues. The PIF is planning, for example, to launch a new airline Riyadh Air, with a goal to fly to 100 destinations by 2030. A new six runway airport is also in the works and Saudi Arabia wants to attract 100mn visitors a year by the end of the decade. Its Heathrow stake would give it a measure of influence over one of the world’s biggest airports.<br/>
https://portal.staralliance.com/cms/news/hot-topics/2023-12-11/general/why-saudi-arabia-and-private-equity-have-landed-stakes-in-heathrow
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Why Saudi Arabia and private equity have landed stakes in Heathrow
As Heathrow prepares for its rush of Christmas travellers, Europe’s busiest airport is embarking on a big shake-up of its ownership as Saudi Arabia’s Public Investment Fund and private equity firm Ardian take control of a chunk of the business. At the end of last month, Spanish infrastructure group Ferrovial announced it would sell its remaining 25% stake in Heathrow to Saudi Arabia’s PIF and French buyout group Ardian for GBP2.4b. But the deal has also raised the prospect that the two new shareholders could increase their stakes further. As part of the terms of Heathrow’s ownership structure, the other shareholders, including Canadian and Australian pension funds, the Qatar Investment Authority and the China Investment Corporation, have the right to sell their stakes to the PIF and Ardian at the same price. The price Ferrovial achieved — which valued the airport’s equity at GBP9.5b, with an enterprise value of just under GBP26b — was seen as “very attractive” by some of the other shareholders and at least one of them would consider selling, according to a person familiar with their thinking. But the person added there was no guarantee that the PIF or Ardian would agree to up their stakes. The two new investors are focused on the current deal — which will require approval from UK competition authorities — and there have been no talks with other shareholders yet, according to another person familiar with the deal. The PIF, which has more than $700bn of assets, is focused on generating a return from the 10% stake it is buying, according to a person familiar with the fund’s decision. But at the same time, Saudi Arabia is making a concerted push into aviation and tourism to try to reduce its reliance on oil revenues. The PIF is planning, for example, to launch a new airline Riyadh Air, with a goal to fly to 100 destinations by 2030. A new six runway airport is also in the works and Saudi Arabia wants to attract 100mn visitors a year by the end of the decade. Its Heathrow stake would give it a measure of influence over one of the world’s biggest airports.<br/>
