EU gives Spanish go-ahead for BAA bid

BRUSSELS - Spanish construction firm Grupo Ferrovial won permission from Europe's top competition authorities yesterday to buy the owner of Britain's Heathrow and Gatwick Airports, BAA.

The permission merely allows Ferrovial to go ahead with the £8.75 billion ($26.8 billion) bid, which was unsolicited.

BAA said on Tuesday that it would return cash to investors if the Ferrovial approach failed.

"After examining the operation, the [European] Commission concluded that the proposed transaction would not significantly impede effective competition in the European Economic Area or any substantial part of it," the commission said.

Ferrovial is bidding with Caisse de Depot et Placement du Quebec and Singapore's GIC Special Investments and is advised by Australia's Macquarie Bank, to which it will sell stakes in Sydney and Bristol Airports if the bid goes through.

Ferrovial said if it bought BAA it intended to focus on Britain and boost capacity, particularly in southeast England.

The Spanish group has traditionally made most of its profits from Spain's booming construction industry, but more recently has expanded overseas and into infrastructure services.

BAA owns seven British air-ports and has stakes in 12 others overseas.

The company has rejected a £9.4 billion takeover approach from a consortium led by US investment bank Goldman Sachs.

It also fought off Germany's Hochtief in December to buy control of Hungary's Budapest Airport from the state for US$2.2 billion ($3.58 billion).

* Last night Grupo Ferrovial said it was willing to drop a condition in its bid for BAA by going unconditional, even if the offer was not supported by three-quarters of the British firm's shareholders.

In its April 20 offer document, the firm said it had agreed with its banks not to declare the offer unconditional until it had received acceptances for more than 75 per cent of BAA shares.

- REUTERS