Saudi Arabia takes stake in Heathrow in £3.3bn deal

Christopher Jasper
Fri, 14 June 2024 

The departure hall at Heathrow Terminal 3 - Maja Smiejkowska/Reuters

Saudi Arabia secured a 15pc stake in Heathrow Airport as part of a £3.3bn investment alongside French private equity giant Ardian.

The oil-rich nation’s Public Investment Fund (PIF), chaired by Crown Prince Mohammed bin Salman, has been targeting the purchase since 2022 as part of a push to diversify the economy.

The PIF and Ardian announced the purchase of a 25pc stake in Heathrow from Spanish builder Ferrovial in November. They later said they were in talks with other investors to lift their holding to 60pc, raising the prospect of the Saudis taking control of a key UK asset.

In the event, they will have a combined stake just short of 38pc, with Ardian becoming the biggest single shareholder and the PIF ranking third, behind the Qatar Investment Authority, which held out against reducing its 20pc holding.


A source close to the transaction said that on that basis it was not expected to trigger significant national security or competition concerns.

Ardian, which will have a 22.6pc holding, said it was committed to investing in the UK and will support Heathrow in its effort to reduce carbon emissions, grow revenues and withstand external shocks. It did not comment on the long-delayed plans to build a third runway at the airport, which operates close to capacity.

It is understood that, like Qatar, the sovereign wealth funds of China and Singapore also chose to retain the full holdings, as did the Australian Retirement Trust.

Only two investors – Canadian institutional investor Caisse de dépôt et placement du Quebec (CDPQ) and the UK’s Universities Superannuation Scheme (USS) – opted to exploit so-called tag-along rights entitling them to sell at the same price as Ferrovial.

The Spanish infrastructure giant, the primary owner of Heathrow for 17 years, also rowed back from its plan to fully exit its holding and together with CDPQ and USS will control around 10pc of the company.

The purchase by Ardian and the PIF values Heathrow at about £8.3bn, compared with the £9.5bn valuation based on the original deal in November. That reflects the increased size of the transaction, the source said.

Saudi Arabia has become a major investing force around the world as it seeks to prepare for a post fossil fuel economy, and aims to hold $2 trillion (£1.6 trillion) in assets by 2030.

Its highest-profile investments have been in sport, with the purchase of Newcastle United football club and the establishment of the revel LIV golf tour.

The UK has been more relaxed about Middle Eastern investments than some other countries. Dubai-based DP World owns UK ports and Qatar Airways is a major investor in British Airways parent IAG, though a takeover of The Telegraph by the UAE was blocked.

Heathrow expects to attract 82.4m passengers in 2024, beating a record of 80.9m set in 2019.