CIC buckles in at Heathrow

The Chinese fund is the second sovereign wealth fund to recently take a stake in London's Heathrow Airport.

CIC International, a subsidiary of Chinese sovereign wealth fund China Investment Corporation, has acquired a 10 percent stake in Heathrow Airport Holdings (HAH), the UK airports operator formerly known as BAA.

The Chinese fund bought a 5.72 percent stake in HAH from Spanish developer Ferrovial – HAH’s largest shareholder – for £257.4 million (€321.2 million; $416 million) and a further 4.28 percent from other unnamed shareholders in HAH for £192.6 million. 

In all, CIC International paid £450 million to become a shareholder in the owner of Heathrow, Southampton, Aberdeen and Glasgow airports.

In mid-August, a subsidiary of Qatari sovereign wealth fund Qatar Investment Authority paid £900 million for a 20 percent stake in HAH, more than half of which was sold by Ferrovial. The latter has been progressively diminishing its stake in BAA. Last year, Ferrovial sold 5.88 percent of the firm to US fund manager Alinda Capital Partners for £280 million.

Following completion of the sale to CIC International, due to close today, Ferrovial will own 33.65 percent of HAH. It will still be the airports operator’s largest shareholder and, according to Ferrovial chief executive Inigo Meiras, the Spanish developer is HAH’s main “industrial partner”. 

HAH is currently selling London’s Stansted Airport, following a ruling by the UK’s Competition Commission.

According to Ferrovial, HAH’s airports handled close to 48 million passengers during the first six months of this year.