The Qataris continued their UK shopping spree yesterday, buying a 10 per cent stake in the owner of British Airways worth about £1.15bn.
The surprise deal came on the same day that the gas-rich Arab state sealed its £2.6bn deal for Songbird Estates, the majority owner of Canary Wharf in London Docklands.
The state-owned Qatar Airways became the biggest shareholder in International Airlines Group, which owns BA and Iberia, with its 9.99 per cent acquisition. It comes at an interesting time for the FTSE 100 airline, as IAG, piloted by Willie Walsh, has been occupied with its own, successful pursuit of Aer Lingus, which it is buying for £1bn.
Qatar Airways is, like BA and Iberia, a member Oneworld airline alliance – with Mr Walsh acting as Qatar’s sponsor when it joined. The Gulf carrier’s chief executive, Akbar al-Baker, said the deal was “an excellent opportunity to further develop our westwards strategy”.
Although non-EU investors are banned from buying more than 49 per cent in any European Union airline, Qatar said it “may consider increasing its stake further over time”.
Its move is set to spark more debate over foreign investment in trophy British assets. Mr Walsh welcomed the move, saying the Qataris would be a “long-term supportive shareholder” and adding: “We will talk to them about what opportunities exist to work more closely together and further IAG’s ambitions”.
Qatar Airways is competing with local rivals Emirates and Etihad Airways and has ambitions to become a big player in international aviation. It was the first Gulf airline to enter the Oneworld alliance – which allows 15 of the major airlines to codeshare, offering tickets across each others routes – and last month it became the first carrier to take delivery of Airbus’s next-generation aircraft, the A350 XWB.
It is following in the footsteps of Abu Dhabi’s Etihad by buying its way into European skies – the airline and sponsor of Manchester City FC has built up a 4.1 per cent stake in Aer Lingus over the last two years and is the largest shareholder in Italy’s loss-making Alitalia, as well as owning a stake in Air Berlin. IAG’s takeover of Aer Lingus means Etihad is set to pocket more than $60m (£40m).
Shares in IAG jumped as high as 590p before ending down 19.5p at 544.5p. The stock rose by about a fifth last year, and more than doubled in value in 2013, after Mr Walsh took on Spanish unions and slashed costs at Iberia to turn the carrier into profit.
Meanwhile, the Qatar Investment Authority and its Canadian joint venture partner Brookfield sealed their takeover of the Canary Wharf developer Songbird Estates yesterday after winning over investors representing more than 93 per cent of shares with a 350p offer. Passing the 90 per cent threshold allows the duo to sweep up the remainder of Songbird’s shares in compulsory purchases.
These two deals add to Qatar’s collection of trophy assets in Britain, including Harrods and HSBC’s headquarters – also in Docklands and the UK’s most expensive office building at £1.1bn. Qatar also has stakes in Sainsbury’s and Barclays bank.Reuse content