Saudi Arabia takes 10% stake in Heathrow Airport

Saudi Arabia’s sovereign wealth fund has agreed to pay Spanish infrastructure giant Ferrovial £1 billion for the shares

Saudi Arabia is taking a 10% stake in Heathrow Airport as it increases its investment in the UK.

Its sovereign wealth fund, whose vast array of assets includes Newcastle United FC, has agreed to pay Spanish infrastructure giant Ferrovial £1 billion for the shares.

Ferrovial said it was offloading its 25% holding in Heathrow, 17 years after first buying into the west London hub.

Saudi Arabia’s Public Investment Fund (PIF) is taking 10%, while French private equity group Ardian is buying the other 15% stake.

Although the sale will need to pass regulatory hurdles, it marks the latest push by Public Investment Fund into Britain.

PIF has recently invested in Newcastle United and luxury car maker Aston Martin. It is estimated to have more than £550 billion in assets.

But the fund, which is controlled by Saudi Arabia’s crown prince, Mohammed bin Salman, has faced backlash over its government’s human rights record.

Canada, Singapore, Australia, Qatar and China are also investors in Heathrow.

Ferrovial bought a stake of nearly 56% in the airport in 2006 but by 2013 this had been reduced to 25%.

After a difficult time during the pandemic, Heathrow has largely bounced back.

It flew 59.4 million passengers in the first nine months of 2023, up 34.4% from the previous year. In September passengers topped pre-pandemic levels for the first time.

But Ferrovial this year cautioned that regulatory changes to lower landing charges – the fees paid by airlines to use airports – would hit its portfolio.

It still has a 50% stake in airports in Aberdeen, Glasgow and Southampton, and 49% of Terminal One at New York’s JFK airport.

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