Canadian Fund May Divest Stake in Five EU Airports

Europe’s aviation sector is witnessing a spate of mergers and acquisitions as Ontario Teachers’ Pension Plan (OTPP) mulling to sell its stake in at least five airports including three in the UK and one each in Belgium and Denmark.

According to media reports, OTPP is in talks over the sale of its stake in London City, Birmingham and Bristol airports in the UK, as well as Brussels and Copenhagen airports in a combined value exceeding $12.58 billion.

OTTP is one of the main shareholders of the BAISA consortium, which owns 75% of Brussels Airport Company, together with the Belgian State owns 25% through the Federal Participation and Investment company.

The reports said that OTPP has been reportedly seeking to capitalise on the rebound in air travel by selling its stakes in these five European air transport hubs. It is in talks with minority shareholders who have a 30-day first refusal period to purchase its stakes.

The deal also comes as a number of UK airports are working on expansion plans. London City Airport itself was given the green light by the Labour government for an expansion that would see capacity increase from 6.5 million to 9 million passengers per year.

According to a report in The Sunday Times, the OTPP’s stakes in the airports vary from 25% to 70%, meaning its share could exceed $4.4 billion. The announcement of the sale comes amid a resurgence in air travel following the pandemic, with reports suggesting that potential buyers could include infrastructure investor Macquarie.

Other UK Airports                                                           

It may be recalled that a number of UK airports have been sold this year so far with the latest deal relates to AviAlliance acquiring AGS Airports, which owns and operates Aberdeen, Glasgow and Southampton Airports in a deal worth more than $1.89 billion.

Even Spanish investor Ferrovial, has agreed to sell the majority of its stake in London Heathrow, which has welcomed record number of passengers this summer, to a Saudi-French consortium for $4.15 billion.

In June, French airport operator Vinci acquired a majority (50.01%) stake in Edinburgh Airport, while Gloucestershire Airport is currently up for sale and expected to achieve $31.45 million.

The OTTP and PSP are two of Canada’s famed Maple 8 funds, which collectively manage about $2 trillion in taxpayer-backed pension schemes for teachers, municipal employees and healthcare workers.

The Maple 8, created after a series of reforms to tackle underfunding in the 1990s, have become well known for investing in infrastructure schemes across the globe, including in the UK, the reports said.