The Saudi Public Investment Fund agreed to buy a 10% stake in FGB Topco, which owns London Heathrow Airport, for 2.37 billion pounds ($3 billion).
This acquisition follows the announcement by the Spanish company Ferrovial, which owns a 25% stake in Heathrow Airport, that it is considering selling it.
The Spanish business consented to sell 15% of its shares to French private equity firm Ardian and 10% to the Saudi sovereign fund.
According to the Public Investment Fund, its long-term investments in Heathrow Airport align with its objective of bolstering industries and businesses.
Situated at the crossroads of the United Kingdom’s international trade routes, Heathrow Airport is among the busiest airports globally.
Ardian and the Public Investment Fund will make separate investments under the terms of the agreement. The agreement is also contingent upon certain requirements, such as the ability of FGB Topco’s current shareholders to exercise their priority rights to purchase and to participate in the sale.
An important step in Saudi Arabia’s efforts to increase its foreign investment is the purchase of a portion of Heathrow Airport by the Saudi Public Investment Fund.
Heathrow Airport’s status as one of the most significant airports in the world is further validated by this acquisition.
The Saudi sovereign fund may gain a lot from this acquisition, including:
* Higher revenues: Because the fund owns a portion of the company that operates Heathrow Airport, its investment in the airport may result in greater revenues.
* Enhanced international relations: Given that Heathrow Airport is one of the major global hubs for trade and business, this investment may contribute to the improvement of ties between Saudi Arabia and the United Kingdom.
* Drawing in foreign investment: Given that Heathrow Airport is a popular global hub for businesses and capital, this investment may bring in additional foreign capital to the Kingdom of Saudi Arabia.
In general, the strategic investment made by the Saudi Public Investment Fund to acquire a portion of Heathrow Airport has the potential to yield several advantages for both the Fund and the Kingdom of Saudi Arabia.