Saudi Arabia’s PIF and private equity group Ardian have announced a deal to buy a 38 per cent stake in London’s Heathrow Airport.
France-based Ardian will take a 22.6 per cent share of England’s largest airport, while Saudi Arabia’s Public Investment Fund (PIF) will acquire a 15 per cent share of the transport hub.
The deal is valued at around £3.26bn ($4.1bn) according to media reports, with Heathrow’s largest shareholder, Ferrovial, accepting the offers.
Saudi Arabia’s PIF takes Heathrow stake
A statement from the French private equity firm said: “Ardian, a world-leading private investment house, today announces that it has entered into a revised agreement to acquire a c. 22.6 per cent stake in FGP Topco Ltd. (TopCo), the holding company of Heathrow Airport Holdings Ltd., from Ferrovial S.E. and certain other TopCo shareholders.
“In November 2023, Ardian announced that it had entered into an agreement to acquire 15 per cent of TopCo from Ferrovial. In January 2024, certain shareholders of TopCo (the Tagging Shareholders) elected to exercise their tag along rights in respect of shares representing 35 per cent of the share capital of TopCo.
“The parties have been working towards satisfaction of the condition for the sale of the Tagged Shares to be sold alongside Ferrovial’s shares. Following constructive discussions, Ardian has entered into a revised agreement to acquire c. 22.6 per cent of TopCo from Ferrovial and certain of the Tagging Shareholders (together, the Sellers).
“Under the terms of the revised agreement, infrastructure funds managed and advised by Ardian will acquire c. 22.6 per cent while Saudi Arabia’s Public Investment Fund will acquire c. 15 per cent of TopCo concurrently from the Sellers, through separate vehicles.
“Each of the Sellers will sell a pro rata portion of their shares prior to the transaction and remain as continuing shareholders of TopCo. Following completion of the transaction, the Sellers will retain shares representing 10 per cent of the issued share capital of TopCo, in the same pro rata proportions”.
Saudi Arabia’s PIF’s investment in Heathrow is in line with its strategy to support the business as a long-term partner.
Heathrow is one of the world’s largest air traffic platforms, connecting the UK with global trading partners to help stimulate economic growth.
Sir Tim singled out the experience for passengers in Terminal 3, which is used by Emirates.
He said “travelling from Terminal 3 is a dismal experience” and the building needs reconfiguring to improve the customer journey.
“I was at Heathrow the other day and walking out of our lounge the ceiling height is awful. It looks like a utilitarian structure, post-Second World War. It is just not good enough,” Sir Tim said.
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