13-Mar-2012 8:17 AM

Aéroports de Paris buys 38% stake in TAV for USD874m, creates one of world's largest airport groups

France's Aéroports de Paris Management (ADPM), a wholly owned subsidiary of Aéroports de Paris (AdP), confirmed (12-Mar-2012) it entered into share purchase agreements with Akfen Holding, Tepe Đnsaat Sanayi and Sera Yapı Endüstrisi ve Ticaret on 11-Mar-2012 with respect to the purchase of a portion of shares of TAV Havalimanlari Holding AS and TAV Yatirim Holding AS. Details include:

  • Share issuance and value: Under the agreement, 38% of TAV Havalimanlari Holding’s issued share capital shall be acquired for a total consideration of USD874 million. The transaction values TAV Havalimanlari Holding's equity at USD2.3 billion, equivalent of THY11.3/share and offers a 32% premium to TAV Havalimanlari Holding’s latest closing price. In addition, 49% of TAV Yatırım Holding’s issued share capital will be acquired for a consideration of USD49 million. The transaction values TAV Yatırım Holding’s equity at USD100 million;
  • Fit of acquisition: AdP said the acquisition "fits perfectly with the international strategy" of the company, which focuses on investing in international airports serving above 10 million passengers with strong EBITDA growth potential and located in OECD and BRIC countries. Meanwhile, TAV Airports Holding stated it hopes ADPM will provide it with the expertise it needs to add to its airport portfolio outside of its favoured Middle East, North Africa and CIS regions. The agreement will also facilitate an exchange of information and best practices across their respective airports, more systematic cross-selling between Aéroports de Paris and TAV and a fostering of HR career paths for the employees of both groups;
  • Size of partnership: The partnership would create one of the largest airport alliances in the world, managing directly or indirectly around 180 million passengers in 37 airports. AdP expects to achieve double-digit returns on equity from this transaction. The transaction is expected to be EPS accretive as of 2013;
  • Financing: The investment in TAV will be financed using existing cash and already secured acquisition debt financing;
  • Executive appointments: Hamdi Akın and Dr. M Sani Sener will continue in their positions as Chairman of the Board of Directors and CEO & President of TAV Havalimanlari Holding, respectively. All parties agree the Board of Directors of TAV Havalimanlari Holding will consist of 11 members. While Tepe Insaat & Akfen Holding together will appoint three members, Aéroports de Paris will also appoint three members of the Board of Directors of TAV Havalimanlari Holding. The CEO & President of TAV Havalimanlari Holding will serve as the executive Board member and there will be four independent Board members;
  • Approvals: The share purchase agreements remain subject to regulatory approvals. TAV CEO Sani Sener said he did not expect a mandatory tender offer for minorities shares. The selling shareholders were advised by Credit Suisse, Pekin & Bayar and Ertekin Law Office. Aéroports de Paris was advised by J.P. Morgan, Hogan Lovells and Pekin & Pekin. [more - original PR

TAV: "We believe that our brand, which was born out of the privatization of Istanbul Ataturk International Airport and which we expanded to 12 airports in five countries in just 12 years, will be able to target even more ambitious goals through the collaboration we have realized with Aéroports de Paris, one of world’s leading airport operators. The partnership of these two global airport brands in managing and building airports will result in the extensive know-how stemming from the operation of 37 airports serving 180 million passengers around the world. We have brushed shoulders in the past with ADP all around the world, sometimes as a partner and sometimes as a competitor. We know each other very well in the aviation industry....We are sure that this collaboration will further enhance the success we have gained as a Turkish firm and will lay new growth opportunities before us. We will continue to work towards creating the best value for all our stakeholders, especially for our employees and our customers. As TAV, we have always aimed at becoming the best. Today, we have sealed a great strategic partnership to this effect.  Our collaboration with ADP will also be a source of major capital inflow to Turkey hence we will be able to pursue our dreams and targets one step further," Dr. M. Sani Sener, CEO & President. Source: Company statement, 12-Mar-2012.

Aéroports de Paris: "The partnership with TAV is a major strategic investment for Aéroports de Paris group. Fully in line with our international strategy, this transaction will have a strong positive impact on the Group’s performance. The combination will become a leading worldwide airport operator group, with a long lasting growth perspective. TAV is a high performing airport operator with a talented management, which has achieved continuous growth and impressive results in the past few years. Moreover, Turkey is one of the fastest growing countries in OECD with a favourable business environment. The high quality of the airport portfolio, in Turkey and abroad, is very attractive, as all airports have been recently built, are best-in-class in terms of quality, and have ample room for growth. Not only the geographic proximity but also the cultural and business model proximity of both companies will ease future development plans, in particular in new airports investment opportunities," Pierre Graff, Chairman and CEO. Source: Company statement, 12-Mar-2012.

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