UK airport operator bought by Canadian pension fund for £1.5bn

An operator of UK airports has been bought by Canadian pension fund PSP, with the firm set to take over Glasgow, Aberdeen and Southampton airports in the £1.5bn deal.

AviAlliance, a private airport operator which is wholly owned by the Public Sector Pension Investment Board (PSP Investments), announced the takeover of AGS Airports today.

The acquisition of the company is from Spanish construction firm Ferrovial and the Australian investment bank Macquarie Asset Management for an enterprise value of £1.53bn. 

The transaction, a major UK aviation investment, is subject to regulatory approvals and is expected to complete in the first quarter of 2025, AviAlliance said.

Across its portfolio of managing stakes in airports in Athens, Düsseldorf, Hamburg and Puerto Rico, AviAlliance served some 73m passengers in 2023, up by 20 per cent on the past year.

Gerhard Schroeder, managing director of AviAlliance, said the sites offered “vital connectivity for communities in Scotland and the southeast of England”. 

He added: “As a seasoned airport investor and manager with in-depth industry expertise, AviAlliance will enable each airport to realise their full potential. 

“We are committed to supporting the airports over the long term to expand their route networks, further improve the passenger experience and implement the airports’ sustainability strategy.” 

Sandiren Curthan, managing director and global head of infrastructure at PSP, said the fund was a “significant investor” in Scotland and the UK, with above £10bn invested in the UK.

He added: “We are delighted to add AGS Airports to our infrastructure portfolio and look forward to working with our key stakeholders to improve services to the communities in which AGS Airports operate, recognising the critical role that these airports play in supporting economic growth in Scotland and England.”

The fund hopes to drive growth in domestic and international passenger traffic, amid a continued demand for business and leisure travel, after the Covid-19 pandemic and alongside other UK airports.

AviAlliance was acquired by PSP in 2013, after it was founded in 1993, while PSP opened its second international office in London in 2016.

PSP’s key UK infrastructure investments include majority ownership positions in Forth Ports, one of the largest port operators in Scotland and England, and Angel Trains, the largest rolling stock company in the United Kingdom.

The investor is one of Canada’s largest, with C$264.9bn (£149.1bn) in net assets as of March 2024, and manages the pension plans of Canada’s public servants and armed forces.