Saudi Arabia is taking a 10 percent stake in Heathrow as it ramps up its investments in Britain.
The sovereign wealth fund, which includes Newcastle United FC, has agreed to pay Spanish infrastructure giant Ferrovial £1 billion for the shares.
Ferrovial said it would divest its 25 percent stake in Heathrow, 17 years after its initial purchase in the west London hub.
A fantasy: the Saudi sovereign wealth fund, whose assets include Newcastle United FC, will pay Spanish giant Ferrovial £1 billion for its 10% stake in Heathrow
The Saudi Public Investment Fund (PIF) will take 10 percent, while French private equity group Ardian will buy the remaining 15 percent of the shares.
Although the sale will have to overcome legal hurdles, it marks PIF’s latest move into Britain.
PIF has recently invested in Newcastle United and luxury carmaker Aston Martin. It is estimated to have more than £550 billion in assets.
But the fund, controlled by Saudi Arabia’s Crown Prince Mohammed bin Salman, has faced criticism over his government’s human rights record.
Canada, Singapore, Australia, Qatar and China are also investors in Heathrow.
Ferrovial bought an almost 56 percent stake in the airport in 2006, but by 2013 this was reduced to 25 percent.
After a rocky ride during the pandemic, Heathrow has largely recovered.
It carried 59.4 million passengers in the first nine months of 2023, an increase of 34.4 percent compared to 2022. In September, passengers reached pre-pandemic levels for the first time.
But Ferrovial warned this year that regulatory changes regarding lower landing charges – the fees airlines pay to use airports – would impact its portfolio.
It still has a 50 percent stake in airports in Aberdeen, Glasgow and Southampton, and 49 percent of Terminal One at New York’s JFK airport.