Labour approves Ardian and Saudi swoop for majority stake in Heathrow Airport

The private equity group Ardian and Saudi Arabia’s £3.3bn deal for a 38 per cent stake in Heathrow Airport has cleared the final hurdle after receiving approval from the Cabinet Office, City AM understands.

Whitehall sources confirmed to City AM the deal has been signed off by the government’s Investment and Security Unit (ISU), which is responsible for mitigating any national security risks to the UK following significant transactions or acquisitions.

The deal will see Spanish infrastructure group Ferrovial sell the majority of its stake in Europe’s busiest hub, in a major shake-up following 18 years of ownership.

Paris-based Ardian will acquire a 22.6 per cent stake in Heathrow’s parent company and Saudi Arabia’s Public Investment Fund (PIF) will acquire 15 per cent. Ferrovial will retain 5.25 per cent of its holding, under previously announced terms.

An original agreement for the deal was reached in November. However, a revised deal had to be struck in June as some of Heathrow’s other shareholders, which include pension funds and other sovereign wealth funds, had sought to use so-called tag along rights to also withdraw their investment.

The new deal, which values Heathrow at £8.3bn, saw other shareholders join Ferrovial in reducing their stakes.

Human rights campaigners have previously voiced concern over the PIF’s growing involvement in British assets. The Saudi state-owned fund bought Newcastle United in 2021 and last year unveiled an investment in the supercar maker Aston Martin.

Government approval of the deal comes after Heathrow forecast a record year of passenger traffic in 2024. The airport expects to serve 83.8m passengers this year, an increase of 2.9m on 2019’s prior annual record of 80.9m.

A Heathrow spokesperson said: “This is a shareholder matter and for shareholders to comment on. Heathrow is a vital national asset connecting the UK to the world and driving prosperity in every corner of the country.

“We have a board of experienced infrastructure investors committed to our long-term development which allows us to continue our strategic journey. Right now, our focus is to get on with the job at hand of delivering an excellent Christmas getaway for our customers, and making Heathrow an extraordinary airport, fit for the future.”

The Cabinet Office declined to comment.

Ardian and PIF declined to comment.