INDIA. Groupe ADP is to acquire a 49% stake in GMR Infrastructure Limited’s (GIL) Airports Business division for around INR107.8 billion (US$1.46 billion).
The initial stake of 24.99% will be purchased in coming days. The second tranche is subject to certain regulatory conditions, notably regulatory approvals from the Reserve Bank of India. This will be concluded during the upcoming months, said Groupe ADP.
Upon completion, GMR Airports will be jointly owned with GIL retaining a 51% stake and control over the company. Groupe ADP will be granted extended governance rights.
GMR Group Chairman GM Rao said: “The partnership with Groupe ADP is in line with GMR’s business direction to become a global airport developer and operator. We have been on a journey of defining airports of the future with key focus on passenger experience by leveraging enhanced technology and offering superior amenities. With Groupe ADP, GMR will have smoother access to global markets, opening up newer avenues of business growth.”
Aéroports de Paris SA-Groupe ADP Chairman and Chief Executive Officer Augustin de Romanet said: “The acquisition of a 49% stake in GMR Airports fits within Groupe ADP’s strategy. It sets a robust industrial partnership and enables Groupe ADP to build, only two years after taking control of TAV Airports, a unique worldwide network of airports with a solid industrial expertise and strong development capacities. This acquisition will constitute a growth driver in the medium term, and also a transforming position for the group in one of Asia’s and the world’s most dynamic and promising countries.”
GMR Airports’ portfolio includes seven airports in three countries (India, Philippines and Greece) and a subsidiary specialized in project management (GADL). Three out of the seven airports are operated by GMR Airports: Delhi International Airport and Hyderabad International Airport in India (fully consolidated within GMR Airports) and Mactan-Cebu Airport in the Philippines (consolidated under the equity method in GMR Airports’ financial statements). These handled a total of 102 million passengers in 2019, an increase of +8.4% compared to the previous fiscal year.
The four other airports, which had 22 million of passengers in 2019, are either currently under development (Goa and Heraklion) or won after a bidding process (Nagpur and Bhogapuram). They will be operated by GMR Airports once work is completed.
Groupe ADP said it expects a limited impact on earnings per share for the next five years with this acquisition, which will then become strongly accretive after 2025. It said the acquisition would strongly contribute to the growth of the Return On Capital Employed (ROCE) in the medium and long term.
Groupe ADP said the move is in line with its international development strategy, based on the acquisition of airport clusters located in dynamic regions in terms of economy and air traffic.
ADP said that air traffic in India is expected to rise by +6.5% per year on average between 2018 and 2038, and that international traffic alone is expected to grow at an average pace of +6.7% per year.
The company said that the combination of Groupe ADP, TAV Airports and GMR Airports “gives birth to the leading global network of airports” with a combined 336.5 million passengers (2019 figures).
