London City Airport sold to US consortium
Wednesday, 11 October 2006
Dermot Desmond's London City Airport has been bought by a US financial consortium, including insurer American International Group, for an undisclosed sum.
AIG Financial Products and a joint venture between GE Capital and Credit Suisse called Global Infrastructure Partners agreed to acquire 50% each in the company that owns the airport.
Billionaire Dermot Desmond, who owns the airport, appointed Morgan Stanley earlier in the year to sell it.
Sources familiar with the situation said last month that bids were expected to top £700m sterling. Desmond in 1995 bought the docklands airport in east London for £23.5m.
The Financial Times had reported today that the consortium was poised to win the deal which could value the east London air hub at about £750m sterling (€1.110 billion).
City Airport has become one of the busiest transit points in the UK. It is expected to be a hub for the London 2012 Olympic Games. The consortium said the airport was expected to handle 2.4 million passengers in 2006, up 20% from a year ago.
The deal remains subject to European Union merger clearance and is expected to close in November, the consortium said in a joint statement. Spokesmen from both groups declined to comment on price.
European airports have been drawing investors attracted by stable, long-term income streams thanks to a boom in air travel and predictions that the number of passengers in the region will double to 2 billion by 2020.
Earlier this year Spain's Ferrovial snapped up Britain's BAA, which owns London's Heathrow Airport, in a £10.1 billion bidding war.
