Nov 01, 2012 04:54 PM

CIC to Buy Stake in Heathrow Airport Holdings

(Beijing) – China's sovereign wealth fund is to buy 10 percent of London's Heathrow Airport Holdings Ltd. for nearly US$ 800 million from investors including Spanish infrastructure builder Ferrovial SA, a source close to the fund said.

CIC International Co.'s wholly owned subsidiary has struck a deal to buy 5.72 percent of Heathrow's operator from Ferrovial and another 4.28 percent from an unnamed shareholder, Ferrovial SA said on October 31.

Hong Kong-based CIC International is a subsidiary of China's sovereign wealth fund, China Investment Corp. The firm plans to join Heathrow Airport Holdings as a financial investor and has not decided whether to send a representative to its board of directors, the source said.

The acquisition requires the approval of the European Commission. Ferrovial will receive roughly 257 million pounds, or US$ 413 million, from the sale. Its stake in Heathrow Airport Holdings will be reduced to 44.3 percent, but it will remain the largest shareholder.

The Spanish firm has been looking to sell some assets for cash that could help it ride through its domestic plight as the euro debt crisis worsens. In August, it agreed to sell 10.6 percent of Heathrow Airport Holdings to Qatar Holding LLC, an arm of Qatar sovereign wealth fund. The transaction is awaiting commission approval as well.

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