France’s Vinci in US$3.7 billion swoop on UK’s Gatwick airport
PARIS: France’s Vinci is taking advantage of a Brexit hit to UK asset prices to buy a majority stake in Britain’s second-busiest airport, London’s Gatwick, for 2.9 billion pounds ( US$ 3.7 billion), the construction company said.
The deal to buy a 50.01 per cent stake gives Vinci, which already runs 45 airports in 12 countries, access to the world’s largest metropolitan aviation market and is part of the company’s drive to expand its most promising businesses.
Vinci Airports president Nicolas Notebaert signalled uncertainty over Britain’s departure from the European Union next March had cut the price of buying into Gatwick, and forecast any hit to UK economic growth after Brexit was likely to be offset by a rise in tourism due to a weaker pound.
“Just a few months ago we would not even have dreamed of being able to acquire an unlimited licence in the London airports system for less than 20 times core earnings,” he said on a conference call, referring to the price of the deal.
The acquisition is expected to close by June 2019.
It comes just days after drone sightings caused 36 hours of chaos for more than 100,000 travellers at Gatwick.
CEO Stewart Wingate, who will remain in his role, said the airport was working to avoid a repeat of the disruption.
Thirty miles south of London, Gatwick serves 228 destinations in 74 countries and is a major base for airlines including EasyJet and British Airways.
It handles over 46 million passengers per year, more than a quarter of the 170 million passenger journeys the London airports system – led by Heathrow – handled in 2017.
Vinci says Gatwick is the most efficient airport in the world and operates the busiest single runway, which in 2017 achieved a record 950 flights in one day.
Gatwick plans to serve growing demand by optimising its existing runway and boosting use of its standby one.
Vinci is buying Gatwick shares from existing shareholders.
Investment group Global Infrastructure Partners will halve its stake to 21 per cent, while Abu Dhabi Investment Authority will own 7.9 per cent, California Public Employees’ Retirement System 6.4 per cent, National Pension Service of Korea 6 per cent and Australia’s Future Fund Board of Guardians 8.6 per cent.
The deal follows Vinci’s purchase this year of the airport management portfolio of Airports Worldwide, which allowed it to enter the United States and expand in Europe.
Notebaert said the deal would ‘not in the least’ affect Vinci’s interest in Paris airports operator ADP, which the government plans to privatise.
“For ADP, all depends on the terms the government will set in coming months. We have the financial and operational capacity,” he said.
Vinci operates airports in countries including France, Portugal, Britain, Sweden, Serbia, Cambodia, Japan, United States, Dominican Republic, Costa Rica, Chile and Brazil. — Reuters