UAE sovereign wealth fund Mubadala is considering purchasing a stake in London’s Heathrow Airportafter being approached by Paris-based buyout firm Ardian, Bloomberg reports, citing sources with knowledge of the matter. Negotiations are ongoing and no final decision has been reached, the sources said, adding that Mubadala could decide not to go ahead with the acquisition.

Why did Ardian approach Mubadala? Spain-based infrastructure firm Ferrovial agreed in November to sell its 25% stake in Heathrow in November, with a 10% stake going to Saudi sovereign wealth fund the Public Investment Fund (PIF) and the remaining 15% acquired by Ardian through separate vehicles. Shareholders accounting for another 35% stake in the airport have invoked tag-along rights, requiring that they be included in the sale consideration and thereby upping the Heathrow stake on offer to 60%. PIF does not want to increase its 10% share, but Ardian is considering increasing its stake seeking additional partners to snap up the additional 35% stake, Bloomberg writes.

GCC-based sovereign wealth funds are heavily established in British logistics infrastructure,with many choosing to invest in the sector as part of a general drive to diversify non-oil incomes, Bloomberg said. Qatar Investment Authority currently holds a 20% stake in Heathrow, and UAE-based port operator DP World manages ports and terminals at London Gateway and Southampton, with the trend raising concerns in the UK surrounding the strategic implications of Middle Eastern ownership of key infrastructure, the outlet said.

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