Saudi sovereign wealth fund acquires 10% share in Heathrow airport through investment

Saudi Arabia's Public Investment Fund (PIF) has agreed to purchase a 10% stake in Heathrow airport from Spanish infrastructure company Ferrovial. In addition, French-based private equity fund Ardian will acquire another 15% stake in the airport's parent company, FGP Topco. Ferrovial, which has held a stake in Heathrow since 2006, announced that the deal is valued at £2.37 billion ($3 billion). The transaction is still awaiting regulatory approval. If approved, this deal will mark the end of Ferrovial's investment in Heathrow, which initially stood at 56% but was reduced to 25% by 2013. Other stakeholders in FGP Topco include Qatar Investment Authority, Caisse de dépôt et placement du Québec, Singapore's GIC, Australian Retirement Trust, China Investment Corporation, and Universities Superannuation Scheme. Heathrow airport has faced financial losses this year due to significant debt impacted by high borrowing costs. The Civil Aviation Authority has decided to lower passenger charges, which contribute to terminal, runway, baggage system, and security expenses. While the average charge per passenger at Heathrow for 2023 is £31.57 ($41.16), the regulator expects this figure to decrease to £25.43 ($33.20) in 2024 and remain relatively stable until the end of 2026. Heathrow management aimed for higher charges above £40 ($52.16), while airlines proposed a maximum of around £18.50 ($24.11). PIF, one of the world's most active sovereign wealth funds with over $700 billion in assets, has been utilizing its oil wealth to invest in various industries, including sports like football and golf. However, it is worth noting that the fund is controlled by Saudi Arabia's Prince Mohammed bin Salman Al Saud, whose government has been accused of human rights violations. US intelligence agencies have alleged that Prince Mohammed ordered the killing of journalist Jamal Khashoggi in 2018, although he has received immunity in the US. Additionally, he has been invited to visit the UK according to the Saudi Arabian embassy.