MAG swoops for £1.5bn Stansted

MANCHESTER Airports Group (MAG) has won the race to buy Stansted.

It has beaten off competition from Australia’s Macquarie and Malaysia Airports for the airport in Essex, paying £1.5bn.

The price is 15.9 times Stansted’s expected 2012 earnings before interest, tax, depreciation and amortisation of £94.2m.

The acquisition is a major achievement for MAG which is now expected to focus on turning around the fortunes of the airport which has seen passenger numbers fall.

MAG, which also owns East Midlands and Bournemouth airports, has partly funded the deal by agreeing to sell a 35% stake to Australian private equity group Industry Funds Management.

At present it is owned by the 10 local authorities of Greater Manchester, with Manchester holding 55% and others 5% each. Under the terms of the deal Manchester’s stake will drop to 35% and the other nine authorities will share 30%.

In a statement MAG said it had a “detailed integration plan in place to ensure a seamless transition of ownership and operations at Stansted… the combined group that this acquisition creates will generate significant benefits for all stakeholders”.

MAG’s chief executive Charlie Cornish said: “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.”

He added: “MAG has a strong track record of creating shareholder value through strategic investment and enhancing operations to improve customer service and drive increased passenger numbers.

“We will use that expertise at Stansted to ensure that the airport can fulfil its potential as a high quality alternative London access point for global air travellers. Stansted has scope to benefit from significant volume growth over the short, medium and long term.”

Manchester City Council leader Richard Leese said: “MAG is a key driver of jobs and growth in the North of England and the acquisition of Stansted will help us deliver maximum value for Manchester City Council and the other local authority shareholders.”

Heathrow Airport Holdings, formerly BAA, has been forced to sell Stansted on competition grounds. Chief executive Colin Matthews said: “Stansted Airport and its people have been part of our company for a long time.

“We wish the new owners every success and are confident the airport will continue to flourish. We will continue to focus on improving Heathrow, Glasgow, Aberdeen and Southampton airports.”

Every year Stansted handles around 17.5 million passengers and 131,400 flights. The deal is expected to complete by the end of February.

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