Blackstone takes a small stake in the UK’s AGS Airports – what is the motivation?

It was only at the end of 2024 that CAPA - Centre for Aviation reported on a sudden flurry of activity in the airport sector M&A business involving Canadian pension funds, one of which is PSP Investments - the owner of Germany's AviAlliance.

AviAlliance itself had bought AGS Airports, three smaller facilities in the UK, each of which had found the going to be hard in the COVID pandemic years, and had failed to mark a serious turnaround in fortunes since. Even though each is confident of its future path, and has infrastructure plans in place accordingly.

Now, and in a rare example of an almost immediate on-sale, the US alternative asset management and financial services company Blackstone has taken a 22% stake in AGS Airports from AviAlliance/PSP, leaving the latter with a 78% share.

To PSP/AviAlliance this deal provides a welcome financial backstop, but it is harder to fathom Blackstone's motives. It already has part ownership in airports in France and Italy, including some with a cachet, like Rome and Nice.

It may be attracted to UK airports generally, because there has been considerable M&A activity in recent years, but that has been at much bigger airports like London Heathrow and Gatwick, and Edinburgh.

Moreover, at each of the three AGS airports there have been difficulties, and all have seen traffic diminish as a result. None of those difficulties will go away anytime soon, while decisions on North Sea oil and gas contracts (Aberdeen Airport) and on a third Heathrow runway (together with Edinburgh Airport's growing influence over Glasgow in Scotland) will continue to conspire against them.