BAA seals Budapest victory

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John Rimmer

19-Dec-2005

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The UK airports group has won the tender to operate Budapest Ferihegy airport in what CEO Mike Clasper called "the biggest privatisation in [our] history"

As expected BAA has won the tender to take over Budapest Ferihegy airport after the Hungarian government accepted its offer of £1.26bn ($2.17bn) for a 75% stake in the airport. The UK airports group will begin the 75-year contract on December 23.

The Hungarian state has retained a 25% stake in Ferihegy and has an option to sell its share to BAA at any time before 2011.

BAA's victory ends a protracted tender during which the process was ruled invalid by the Hungarian courts, which criticised the State Privatisation Agency for failing to consult key workers and trade unions. After the process was finally re-launched, BAA withstood competition from groups including Hochtief and Fraport to post the winning bid.
BAA has stated that international expansion is a priority for the company following big investments in its home market, notably London Heathrow airport's long-awaited terminal five.

The anchor duty-free retailer at Budapest Ferihegy is Hungarian Duty Free, a joint venture between the Hungarian government and Gebr Heinemann. The company won a tender to operate at the airport's T1 earlier this year and hopes to benefit from expansion plans in T2.

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