In a significant move, the state investment fund of Saudi Arabia has secured a 10% stake in Heathrow Airport, acquiring it for £1 billion from the Spanish infrastructure company Ferrovial. Reports from the British press indicate that Ferrovial is selling its interest in Europe’s largest airport after 17 years.
Ferrovial divested a quarter of its share in the Heathrow parent company, FGP Topco, for £2.4 billion. The French private equity group Ardian acquired a 15% stake, while the remaining shares went to the Saudi Public Investment Fund (PIF).
Pending approval from regulatory authorities, these agreements will mark the end of Ferrovial’s investment in Heathrow, which began at 56% in 2006 but gradually reduced to 25% by 2013.
“Over the past 17 years, we have contributed to the transformation of Heathrow alongside our fellow stakeholders, achieving some outstanding milestones throughout our long-standing role as investors,” said Luke Bugeja, Head of Ferrovial’s airport division.
“We are very pleased to have made Heathrow one of the most connected airports globally and the busiest airport in Europe.”
Other shareholders in Heathrow’s parent company include the Qatar Investment Authority with a 20% stake, Caisse de dépôt et placement du Quebec, Singapore’s GIC sovereign wealth fund, the Australian Retirement Trust, China Investment Corporation, and the Universities Superannuation Scheme.
Ferrovial stated its commitment to the United Kingdom and its investments in other airports. The company owns half of Aberdeen, Glasgow, and Southampton airports, holds a 49% share in Terminal 1 at New York’s JFK Airport, and has a 60% investment in Dalaman Airport in Turkey.
PIF stands out as one of the most active sovereign wealth funds globally, boasting assets exceeding £551 billion due to its petroleum wealth. Recently, it has diversified its investments into sports, including football and golf. The fund is controlled by Saudi Arabia’s Crown Prince, Mohammed bin Salman Al Saud, whose government has faced allegations of numerous human rights violations.
While Heathrow’s passenger numbers tripled in 2022, the airport reported adjusted losses of £684 million, compared to approximately £1.3 billion the previous year. It anticipates reaching 83% of its 2019 passenger levels this year.
In September, the competition regulatory authority rejected Heathrow’s appeal against the Civil Aviation Authority’s decision, compelling it to reduce passenger fees by nearly a fifth in the following year.
The average charge per passenger at Heathrow for 2023 is £31.57. However, the regulatory authority stated that this would decrease to £25.43 in 2024 and would “remain broadly stable” until the end of 2026.
