Saudi Arabia‘s Public Investment Fund (PIF) is set to acquire a ten percent stake in Britain’s Heathrow Airport from Spanish infrastructure firm Ferrovial and an additional 15 percent in the airport’s parent company, FGP Topco, from French-based private equity fund Ardian.
The £2.37 billion ($3 billion) transaction announced by Ferrovial is still subject to regulatory approval. If successful, this would conclude Ferrovial’s investment in the UK airports’ operator, which initially held a 56 percent stake in 2006, reduced to 25 percent by 2013.
The airport has been incurring financial losses this year due to high borrowing costs on its debt. The UK Civil Aviation Authority’s decision to reduce passenger charges — contributing to terminals, runways, baggage systems, and security expenditures — is a significant factor.
The reduction brings the average charge per passenger at Heathrow in 2023 from £31.57 to £25.43 in 2024, staying constant till 2026. Heathrow executives had hoped to raise charges to over £40, while airlines suggested a cap of around £18.50.
The PIF, one of the world’s most active sovereign wealth funds, with assets exceeding $700 billion, reflects Saudi Arabia’s continuing global investments across various sectors despite international concern over the kingdom‘s human rights record.
