2023-11-29 10:49:08
“Saudi Sovereign Wealth Fund to Acquire Stake in Heathrow Airport Operator”
Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), is set to purchase a 10% stake in London’s Heathrow Airport operator for £1 billion. The stake is being acquired from Spanish infrastructure company Ferrovial, which has owned the port for the past 17 years, as reported by the Financial Times.
In addition to the Saudi investment, Ferrovial is also selling a 15% stake to French private equity firm Adrian for 1.4 billion pounds. Ferrovial had acquired the airport in 2006 after a hostile takeover bid for BAA, the previous operator. However, the company has reportedly been facing challenges with regulatory demands, particularly the request to lower landing fees by nearly 20%. The average cost per passenger at Heathrow is expected to decrease from £31.57 to £25.43 next year.
Furthermore, Heathrow has been experiencing financial difficulties, with reported losses this year partly attributed to high interest rates increasing the expense of the company’s debts. Ferrovial had initially held a 56% stake in Heathrow, which was reduced to 25% in 2013.
The Saudi Capital Fund, managed by Crown Prince Mohammed bin Salman and overseeing assets worth over 700 billion dollars, has been actively investing in various sectors. The acquisition of the stake in Heathrow adds to the fund’s diverse portfolio, which includes investments in sports car manufacturers, gaming, and golf.
The transaction is still subject to regulatory approval, as confirmed by Ferrovial. Other stakeholders in Topco, the Heathrow operator, include the Qatar Investment Fund, the Sovereign Capital Fund of Singapore, and the Australian Pension Fund. This move by the Saudi sovereign wealth fund further emphasizes its growing role as a major player in global investments.
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