Asset AllocationDecember 8, 2023

Saudi Arabia’s Sovereign Wealth Fund Acquires 10% Stake in Heathrow Airport Owner

The deal includes French private equity firm Ardian acquiring a 15% stake in FGP TopCo, leaving the Qatar Investment Authority as the largest shareholder.

Reported by Michael Katz

Saudi Arabia’s Public Investment Fund has agreed to acquire a 10% stake in Heathrow Airport owner FGP TopCo Ltd, which oversees Heathrow Airport Holdings Ltd., from Spanish infrastructure giant Ferrovial SA, which is selling its entire 25% stake in the holding company.

Under the terms of the agreement, the PIF will acquire a 10% stake in FGP TopCo, while French private equity firm Ardian will acquire a 15% stake from Ferrovial through its infrastructure funds for just under 2.37 billion pounds ($3 billion). That values the PIF’s share at approximately $1.2 billion, while Ardian’s stake is worth approximately $1.8 billion.

“PIF is pleased to be investing in Heathrow, a world-class airport,” stated a PIF release. “PIF’s investment in Heathrow is in line with its strategy to support the business as a long-term partner.”

With its 25% ownership stake, Ferrovial is currently the largest shareholder in FGP TopCo, while the Qatar Investment Authority is set to assume that mantle with its 20% stake. Other owners include Caisse de dépôt et placement du Québec 12.62%, GIC 11.20%, Australian Retirement Trust 11.18%, China Investment Corporation 10% and Universities Superannuation Scheme 10%.

According to the companies involved in the deal, the transaction is subject to compliance with the right of first offer and full tag-along rights, which may be exercised by the other TopCo shareholders, per the shareholders’ agreement and the company’s articles of association, along with meeting applicable regulatory conditions.

“Over the last 17 years, we have been contributing to Heathrow’s transformation, together with our fellow shareholders, achieving some excellent milestones throughout our long-term role as investor,” Luke Bugeja, CEO of Ferrovial Airports, said in a statement. “These include overseeing an investment of 12 billion pounds, expanding its capacity with the construction of Terminal 2, and improving its operational performance.”

Ferrovial, which became the majority shareholder at Heathrow in 2006 and has reduced its share over the years, also owns a 49% in stake in Terminal One at JFK Airport in New York, a 50% stake in airports in Aberdeen, Glasgow and Southampton in the U.K. and a 60% stake in Dalaman Airport in Turkey.