Manchester Airports Group, owner of Britain’s busiest airport outside London, agreed to buy London’s Stansted Airport for 1.5 billion pounds ($2.38 billion) in cash to add Europe’s premiere low-cost hub.
Manchester is buying the airport from Heathrow Airport Ltd., which is ceding 100 percent of Stansted to comply with regulatory requirements. The transaction will probably close by the end of February, Heathrow said in a statement yesterday.
Adding Stansted, which lies about an hour north of London, gives Manchester a fourth airport in the U.K. and a potential second base to attract international airlines including Emirates, which already serves Manchester with an Airbus A380. Stansted lured 18 million people in 2011 and specializes in low- cost services, with Ryanair Holdings Plc (RYA) as its No. 1 operator. Manchester attracted 19 million customers.
“The transaction represents a significant milestone in the achievement of our previously stated strategy of adding a quality airport to the group and delivering long term value to our shareholders,” Manchester Airport Chief Executive Officer Charlie Cornish said in a company release.
Stansted, designed by U.K. architect Norman Foster, ranks as London’s third-busiest airport behind Heathrow, Europe’s busiest, and Gatwick south of the capital. Manchester said on Oct. 17 that it would bid for Stansted following the announcement of an auction on Aug. 20 by Heathrow amid pressure for an asset sale from U.K. antitrust regulators.
Manchester is counting on financial backing from Industry Funds Management of Australia, which will take a 35.5 percent interest in the enlarged group, according to a separate statement. The deal represents an acquisition multiple of 15.6 times 2012 earnings before interest, tax, depreciation and amortization, Manchester said.
Another bidder for Stansted was Australia’s Macquarie Group Ltd. (MQG), the Daily Telegraph reported Jan. 8, citing people with knowledge of the auction process. Heathrow didn’t identify a rival bidder when it announced the sale .
Manchester, which also runs the East Midlands and Bournemouth terminals, is served by 10 foreign long-haul carriers. The north English airport is also the only one in Britain outside Heathrow used by the A380 superjumbo, the world’s biggest jetliner.
“We will continue to focus on improving Heathrow, Glasgow, Aberdeen and Southampton airports,” Heathrow Chief Executive Officer Colin Matthews said in the release.
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