Saudis set to take control of London’s Heathrow Airport

Investors from the Middle East, more specifically, Saudi Arabia, are all set to take majority control of London’s Heathrow Airport (LHR), the main international airport serving London, as more and more investors are divesting their stakes in the airport. 

In the latest stake sale, Saudi Arabia’s Public Investment Fund (PIF) has agreed to acquire a 10 per cent stake in LHR, while Paris-based investment company, Ardian, will acquire a 15 per cent stake..

The airport, which is the UK’s largest, is owned and operated by Heathrow Airport Holdings, which in turned is owned by a Spanish infrastructure company, called Ferrovial..

Madrid-based Ferrovial had confirmed the sale of its stake in LHR to Saudi Arabia’s PIF and Ardian for nearly $3 million.

The majority control of London Heathrow Airport (LHR) may ultimately be in the hands of Saudi Arabia as investors are reportedly considering selling their stakes. 

Commenting on the stake sale, Luke Bugeja, CEO of Ferrovial Airports, 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 pounds [$15 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 per cent share in Aberdeen, Glasgow, and Southampton airports in the UK, 60 per cent in Dalaman Airport in Turkey, and 49 per cent in Terminal 1 at John F. Kennedy International Airport in New York.

Ferrovial said it would remain committed to the UK market, delivering value and sustainable growth” for the region.

At least one other shareholder is close to selling stake in LHR, while other investors could follow suit, a reports in the Guardian said, adding that other investors, including international pension funds with 35 per cent stake may likely sell at the same price,

Other shareholders of LHR include the Qatar Investment Authority, which has a 20 per cent stake and is reportedly unwilling to sell to Saudia Arabia. Five additional shareholders owning between 10 and 13 per cent are also unlikely to sell.

With assets of over $700 billion, Saudi Arabia’s PIF is one of the most active wealth funds in the world.