Saudi Arabia Increases Stake in Heathrow with £3.3 Billion Deal

June 15, 2024

Heathrow Airport’s fast track service, costing £12.50 per person, allows passengers to schedule a one-hour window to pass through security with ease.

Infrastructure giant Ferrovial announced a new agreement on Friday with French private equity firm Ardian and Saudi Arabia’s Public Investment Fund (PIF) to sell most of its 25% stake in Heathrow Airport, while retaining a 5.25% interest.

According to the new deal, Ardian and PIF will acquire 22.6% and 15% respectively of FGP Topco, the parent company of Heathrow Airport Holdings Ltd, for a combined total of £3.26 billion. This agreement follows an initial arrangement announced last year, where Ferrovial planned to sell its entire stake for £2.37 billion, valuing Heathrow at £9.48 billion. The revised deal values the airport at £8.66 billion.

Ferrovial, which relocated its holding to the Netherlands last year, did not disclose its earnings from the new agreement, which is pending regulatory approval, nor did it reveal the identities of the other selling shareholders. The company and its partners will retain a 10% stake in Heathrow.

Ferrovial, known for building and managing highways and airports, is currently expanding its operations in the United States, including the construction of a new terminal at New York’s John F. Kennedy International Airport. The company aims to finalize the Heathrow sale by the end of 2024.

Additionally, Ferrovial is contemplating joining its partner, Australian financial group Macquarie, in a potential sale of stakes in three other British airports: Aberdeen, Glasgow, and Southampton, as revealed by a Ferrovial executive in May.

The European airport sector has seen an uptick in deal-making activity, exemplified by Vinci Airports’ acquisition of a 50.1% stake in Edinburgh Airport earlier this year.