Travel infrastructure deal
Spanish construction company Grupo Ferrovial SA, back by a consortium of equity groups from as far abroad as Canada and Singapore, says it has agreed to buy British-based airport operator BAA PLC in another example of the consolidation of travel and transport services worldwide. The deal is for around $19 billion, after a four month hostile bid process. The company outbid US-based equity funs Goldman Sachs Group.
BAA, which calls itself "the world's leading airport company," owns some of world's biggest airports. It owns the big London airports (Heathrow, Gatwick, and Stansted), as well as four those in Glasgow, Edinburgh, Aberdeen, and Southampton. In other airports, it manages specific areas as security, airport shops, restaurants, engineering, parking and other areas. It manages major parts of US airports In Boston, Pittsburgh, Baltimore, and Indianapolis; in Italy at Naples; in Hungary at Budapest; and in Australia at Melbourne and Perth, as well as four smaller airports.
Ferrovial is involved in many areas of transportation infrastructure. While strong in Spain, it has also expanded beyond its borders. In 200 it acquired Budimex, Poland's #1 construction company. In 2005, it bought Texas's #3 construction company Webber. In the last year it has been engaged in building roads, bridges, sewer systems, airport buildings, rail lines, and canals, as well as residences.
The company is one of the largest Spanish homebuilders. It also has a major presence in Spanish real estate sales.
It has a big role in municipal services, including waste treatment, trash collection, and grounds maintenance, along with local road maintenance. The services division is growing in both Spain and the UK and is looking at the SU market.
Ferrovial runs a toll road and parking management business through its Cintra subsidiary. The company operates tolls road in Spain, Ireland and Italy, and also won a long-term contract to run the Chicago Toll Road and the Indiana Turnpike in the US. It also manages a handful of airports in the UK, Chile, Portugal, and Australia (a good fit with BAA).
The merger is part of a movement of international consolidation of the kind of services dealing with crucial domestic infrastructure that used to be in the public sector or done by hiring local contractors. It's closely related to the international consolidation of water, electric, and gas, along with port management and toll roads.
