A consortium led by Ontario Teachers’ Pension Plan Board and Borealis Infrastructure won a bidding war to buy London City Airport for about 2 billion pounds ($2.8 billion), according to people familiar with the matter.
The group beat a rival bid from China’s HNA Group to acquire the facility from Global Infrastructure Partners, the person said, asking not to be identified as the deal isn’t public. Cheung Kong Infrastructure Holdings Ltd. had also been interested in bidding, people familiar with the matter said Wednesday.
Representatives for GIP and Teachers’ declined to comment, while a representative for Borealis didn’t respond to a request for comment. An official for HNA Group couldn’t be reached for comment outside of regular business hours.
The winning bid was reported earlier by the Financial Times.
The airport, located about 6 miles (10 kilometers) from London’s financial district and opened in 1987, was acquired by American International Group Inc. and GIP in 2006. At the time, news reports said the companies agreed to pay 750 million pounds ($1.04 billion), though terms weren’t disclosed. Two years later, American International sold its stake to GIP and Highstar Capital, which now owns 25 percent.
The Canadian-led group will have to come to terms with a political conflict that stands in the way of a planned expansion that would help City serve 6.5 million passengers a year by 2023. London Mayor Boris Johnson vetoed a 250 million-pound plan to add aircraft stands, an arrivals terminal and taxiway last year.
London City Airport handled a record 4.32 million passengers in 2015, 18 percent more than a year earlier, even with the size of aircraft limited by its short runway and noise-curtailment rules requiring steep takeoffs and landings. London Heathrow, Europe’s busiest airport, moved 75 million travelers.