Saudi wealth fund to buy 10% Heathrow stake for almost £1bn

The Saudi Public Investment Fund said it would “support the business as a long-term partner.” (PA)
The Saudi Public Investment Fund said it would “support the business as a long-term partner.” (PA)

The Saudi sovereign wealth fund has snapped up a 10% stake in Heathrow airport in an ownership reshuffle that values the west London hub at almost £10 billion.

Saudi Arabia’s Public Investment Fund (PIF) is one of two new owners buying out debt-laden Spanish infrastructure giant Ferrovial, which has agreed to sell its entire 25% holding for £2.37 billion.

The other 15% is being acquired by Paris-based private equity firm Ardian. The deal, ending 17 years of ownership by Ferrovial, is subject to agreement by other shareholders and regulators.

The PIF purchase is the latest in a slew of deals driven by Saudi Crown Prince Mohammed bin Salman.

The PIF aims to reach $2 trillion of assets by 2030 The two new owners join Qatar, which holds 20%, and smaller investors Caisse de dépôt et placement du Québec, Singapore’s GIC sovereign wealth fund, and Alinda Capital Partners of the US.

Ferrovial Airports CEO Luke Bugeja said: “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. These include overseeing an investment of £12 billion, expanding its capacity with the construction of Terminal 2, and improving  its operational performance.

“We are very pleased to have made Heathrow one of the world’s most connected airports and the busiest airport in Europe.”

Ferrovial also holds a 50% share in Aberdeen, Glasgow and Southampton airports.

There was no comment from Heathrow.

In a statement PIF said it was pleased to be investing in “a world-class airport, which acts as a key gateway to the world.

PIF’s investment in Heathrow is in line with its strategy to support the business as a long-term partner.”

Ardian, a previous investor in London Luton airport, said: “Heathrow is a strategic asset for the UK economy and plays a key role enhancing global connectivity.”

The deal is  subject to existing shareholders rights of first offer, which could allow them to buy the stake instead on similar terms.