AXA PE and Spain’s AENA Agree to Buy London Luton Airport

Aena, Spain’s state-owned airports operator, said it would buy London Luton Airport Group Ltd. from Abertis Instraestructuras SA as it seeks to diversify outside its recession-hit domestic market.

Aena, which owns 46 airports in Spain, will pay 394.4 million pounds ($522.3 million) for the facility alongside the infrastructure fund of Axa Private Equity, Aena said in a statement today. Aena will own a 51 percent stake in the airport, with Axa controlling the remainder. Aena previously controlled 10 percent of the site in partnership with Barcelona-based Abertis.

The Luton airport sale is the second in London this year after Stansted Airport was bought by Manchester Airports Group for 1.5 billion pounds in February. Located about 32 miles (51 kilometers) northwest of the capital, Luton handled 9.6 million passengers last year and is the base for Europe’s second-biggest discount carrier EasyJet Plc.

“We aim to substantially build up London Luton in consultation with all its stakeholders,” Aena Executive Chairman Jose Manuel Vargas said in the statement. The airport is London’s fourth biggest in terms of passenger numbers behind Heathrow, Gatwick and Stansted.

Majority Positions

AENA and Axa Private Equity obtained 285 million pounds of loans backing their acquisition of Luton, according to three people with knowledge of the matter. The loans comprise 220 million pounds of drawn debt, 50 million pounds of capital expenditure facility, and 15 million pounds of working capital facility.

The purchase is part of a strategy to boost Aena’s assets outside Spain from minority to majority positions, the company said. Aena has also “expressed interest” in the Rio de Janeiro and Belo Horizonte airports in Brazil, it said.

Spain’s recession eased in the second quarter, pushing unemployment down from its highest level in the country’s democratic history. The government is seeking to overhaul the euro region’s fourth-largest economy to solidify a “fragile” recovery, Economy Minister Luis de Guindos said last week.

“We look forward to working with AENA and AXA to deliver enhancements to London Luton Airport which will result in sustainable growth, long term development and an improved customer experience,” EasyJet U.K. Commercial Manager Hugh Aitken said in a statement.

Regulatory Pressure

London’s largest landing strips were once dominated by the British Airports Authority, which under the ownership of Madrid-based Ferrovial SA controlled over 90 percent of airport passengers in southeast England in 2008. Amid pressure from U.K. antitrust regulators, BAA sold Gatwick to Global Infrastructure Partners Ltd. for 1.51 billion pounds in 2009 and was subsequently re-named Heathrow Airport Ltd.

At peak periods Luton serves fourteen Spanish airports and will be the fifth largest airport in Aena’s portfolio. The deal must be approved by competition authorities, the Luton Borough Council, and the Spanish government.

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