BEIJING, China – The Chinese government’s main sovereign wealth fund said Thursday it has bought a 10 per cent stake in the operator of London’s Heathrow Airport, expanding its investments in British infrastructure.
China Investment Corp. gave no financial details but Ferrovial, the Spanish company that owns 49.99 per cent of Heathrow Airport Holdings, said the fund paid other shareholders a total of $725.8 million to acquire its stake.
CIC was created in 2007 to manage a portion of China’s multitrillion-dollar foreign reserves in hopes of earning a higher return. Its early investments were mostly small stakes in publicly traded companies to avoid stirring political opposition abroad but the fund has begun making bigger direct investments.
Ferrovial said it sold a 5.72 per cent stake in Heathrow Airport Holdings to a CIC subsidiary, Stable Investment Corp., for 257.4 million pounds ($415.2 million). Ferrovial said Stable also acquired shares from other owners for 192.6 million pounds ($310.6 million) at the same time for a total 10 per cent stake in the company.
The fund’s chairman said last November it wanted to start investing in the United States and Europe in energy, water, transportation and other infrastructure projects. In January, CIC bought 8.7 per cent of London’s water company, the Thames Water Utilities Ltd., for 276 million pounds ($445 million).
CIC also has made direct investments in French oil and gas producer GDF Suez, Russian miner Polyus Gold, Australian toll road operator Horizon Roads and energy, shipping and other companies in South Africa, Canada, Vietnam and Brazil.
China Investment Corp.: www.china-inv.cn