Qatar Holding has received European Union approval for its purchase of a stake in London's Heathrow Airport.
The total deal, worth US$1.45 billion (Dh5.32bn) will see a further 10.62 per cent of Heathrow Airport Holdings (HAH), formerly BAA, transferred from Spanish infrastructure firm Ferrovial to the Qatari global investment house, part of the country's sovereign wealth fund, the Qatar Investment Authority. Agreement was reached on the deal in August and only awaited a 'green light' from the EU's competition authorities.
"The [Davies] Commission concluded that the proposed transaction would not raise competition concerns because none of the companies concerned are active on the same markets and vertical links between their activities are minimal. The operation was examined under the normal merger review procedure," said an EU spokesman.
"This transaction fulfils two objectives for us: it allows us to maintain our position as the principal shareholder and industrial partner of Heathrow Airport Holdings, and it further strengthens our liquidity situation, providing us with notable flexibility to undertake investments in infrastructure and services projects," said Inigo Meirás, the chief executive of Ferrovial. "As an industrial partner and the principal investor, Ferrovial remains committed to HAH."
The Qatari deal was part of a series of share transactions covering the ownership of the United Kingdom's main international hub.
As part of this same transaction, Qatar Holding also acquired stakes of 5.63 per cent of Ferrovial's Heathrow holding company, FGP Topco, from another of Heathrow's shareholders, Britannia Airport Partners. The Qataris also acquired 3.75 per cent from another shareholder, GIC (Government of Singapore Investment Corporation).
As a result, Qatar now owns 20 per cent of Heathrow Airport Holdings, which based on the transaction's share prices, now has a market capitalisation of $7.27bn.
In October, Ferrovial also announced it had reached an agreement to sell 5.72 per cent of FGP Topco to Stable Investment Corporation, a wholly owned subsidiary of CIC International, for $421 million, giving CIC a 10 per cent holding in the airport.
As a result of this transaction, Ferrovial's indirect stake in Heathrow Airport Holdings will now be 33.65 per cent, leaving it still as its largest shareholder.
The other shareholder stakes are Britannia Airport Partners with 13.29 per cent, GIC with 11.88 per cent and Alinda with 11.18 per cent. Qatar Holding will join the boards of FGP Topco and Heathrow Airport Holdings.
"The ownership of Heathrow Airport (has been changing) as Ferrovial seeks to reduce its debt further and reposition itself for changes in infrastructure ownership closer to home," said a spokesman for Capa, The Centre for Aviation, the leading aerospace consultancy.
"Throughout 2012 Ferrovial has successively reduced its exposure to what has become Heathrow Airport Ltd, by selling stakes to Qatar Holding, and latterly to CIC International, an arm of China's leading sovereign wealth fund."
A consortium led by Ferrovial acquired the then BAA in June 2006, when the airport operator owned seven airports across the UK.
Competition regulators enforced the sale of Gatwick and Edinburgh, with Stansted due to follow in the first half of 2013 after BAA gave up a legal battle to retain the airport earlier in 2012. That leaves Heathrow Airport Holdings still in charge of Glasgow, Aberdeen and Southampton airports.