In a strategic move, Saudi Arabia’s Public Investment Fund (PIF) has entered into a share purchase agreement to acquire a 10% stake in TOPCO, the holding company of Heathrow Airport Holdings Ltd. This significant development was reported by the state news agency (SPA) on Wednesday.

The transaction involves Spain's Ferrovial selling its 25% stake in London Heathrow Airport to French and Saudi entities, generating $3 billion for a holding initially valued at zero. As part of this deal, Ardian, a Paris-based private equity firm, will acquire a 15% stake in FGP Topco, the owner of Heathrow Airport, while Saudi Arabia’s Public Investment Fund will secure a 10% stake.

Ferrovial, a diversified infrastructure firm with interests in airports across the UK, Turkey, and New York’s John F. Kennedy, had previously expressed its intention to consider a sale of its holding in London Heathrow. Despite the challenges posed by the COVID-19 pandemic, Heathrow has seen a rebound in traffic, contributing to the narrowing of its losses in the first nine months of this year.

However, Heathrow is still managing a significant debt of over GBP14 billion. The involvement of Ardian and the Saudi Public Investment Fund adds them to the list of FGP Topco owners, including Qatar Investment Authority (20%), and other smaller investors like Caisse de dépôt et placement du Québec, Singapore’s GIC sovereign wealth fund, and Alinda Capital Partners of the US, each holding stakes below 13%.

The completion of the Heathrow deal is contingent on regulatory approvals and the rights of existing shareholders to participate in the transaction. Ferrovial emphasized its commitment to advancing its airport business, with stakes in various airports in the UK, Turkey, and New York.