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Saudi PIF to buy 10% stake in London Heathrow Airport

November 30, 2023 at 1:04 pm

Passengers in the arrivals hall of Terminal 5 at London Heathrow Airport in London, UK, on Monday, June 13, 2022 [Chris J. Ratcliffe/Bloomberg via Getty Images]

Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), has agreed to purchase a ten per cent stake in Britain’s London Heathrow Airport (LHR).

They will be joined by French investment firm Ardian who will be buying a 15 per cent share in one of the world’s busiest airports, after Spanish infrastructure group Ferrovial sold its 25 per cent stake for £2.4 billion ($3.04 billion). The transaction is reportedly still subject to regulatory conditions, the company said.

These rights could be exercised by the airport’s other owners, who include: the Qatar Investment Authority (who hold a 20 per cent stake), in addition to Singapore’s GIC sovereign wealth fund and the Australian Retirement Trust, both of which own 11.2 per cent.

“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,” said Luke Bugeja, CEO of Ferrovial Airports.

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He highlighted capacity and operational progress made during Ferrovial’s tenure, including “…expanding its capacity with the construction of Terminal 2 and improving its operational performance.”

According to Axios, Ferrovial had been slowly selling off its holdings in Heathrow, as the airport had grown increasingly unprofitable, especially with a large debt load amid rising interest rates. LHR is also being forced by British regulators to cut its airline fees from 2024.

The kingdom’s $700 billion sovereign wealth fund, which is chaired by Crown Prince Mohammed Bin Salman (MBS) is looking to bolster its presence in Britain and comes amid LHR’s plans for a third runway.

In a statement yesterday, the PIF said the purchase is “in line with its strategy to support the business as a long-term partner,” calling Heathrow a “world-class airport.”

The facility, it noted, is known for “connecting the UK with global trading partners to help stimulate economic growth.”

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