Saudi Investment Fund to Acquire 10% Stake in Heathrow Airport
Saudi Arabia’s Public Investment Fund (PIF) has reached an agreement to purchase a 10% stake in Heathrow Airport from Spanish infrastructure company Ferrovial. Additionally, France-based private equity fund Ardian will acquire another 15% in Heathrow’s parent company, FGP Topco.
Ferrovial, which has held a stake in Heathrow since 2006, revealed that the deal’s total value is £2.37 billion ($3 billion). The transaction is still pending regulatory approval.
If approved, this deal would mark the end of Ferrovial’s investment in the UK airports’ operator. Ferrovial’s initial stake was 56%, but it was reduced to 25% by 2013. Other stakeholders in FGP Topco include Qatar Investment Authority, Caisse de dépôt et placement du Québec, Singapore’s GIC, Australian Retirement Trust, China Investment Corporation, and Universities Superannuation Scheme.
Heathrow Airport has faced financial challenges this year, primarily due to significant debt and reduced passenger charges mandated by the Civil Aviation Authority. The average charge per passenger at Heathrow for 2023 is £31.57, expected to decrease to £25.43 in 2024 and remain relatively stable until the end of 2026.
Saudi Arabia’s PIF, known for its active investment in various sectors, holds over $700 billion in assets. The fund has recently expanded its investments into sports, including football and golf. However, concerns about human rights violations by the Saudi Arabian government, led by Prince Mohammed bin Salman Al Saud, have been raised internationally.
The US intelligence community has implicated Prince Mohammed in the 2018 killing of journalist Jamal Khashoggi. Despite these allegations, the prince has been granted immunity in the US and invited to visit the UK, as stated by the Saudi Arabian embassy.
