ADP sweeps in to claim GMR Airports

GAL signed an agreement with ADP that will see the French group acquire INR97.8 billion worth of stock in secondary sales and acquire INR10 billion in primary equity, according to a filing. ADP has also agreed to invest INR44.7 billion linked to performance goals and regulatory developments over the next five years leading to a potential valuation of INR264.7 billion for GAL.

The agreement, conditional on regulatory approval, will see ADP acquire nearly 25% initially, with the rest acquired over the coming months.

Last year, a consortium formed by Tata Group, GIC Private and special situations investor SSG Capital had bid for a 45% stake worth INR80 billion. However, the Tata Group had to reduce its stake because of its ownership of two airlines – Vistara and AirAsia India. Last month, GAL had agreed a revised deal selling 49% of the company until ADP came in with the latest bid. 

GMR Infrastructure, the parent company of GAL, will retain management control while forming a strategic partnership with ADP to explore new opportunities for route development, enhanced expertise in operations, retail, IT, innovation, engineering and other areas.

“[The acquisition of a 49% stake] sets a robust industrial partnership and enables Groupe ADP to build, only two years after taking control of TAV Airports [an airport operator in Turkey], a unique worldwide network of airports with a solid industrial expertise and strong development capacities,” said Augustin de Romanet, CEO of ADP.

ADP is the operator of Paris-Charles de Gaulle airport alongside 25 other airports around the world. In 2019, the company says airports under its management handled traffic amounting to 218 million passengers globally per year.

GMR says its airport portfolio has a passenger capacity of 172 million across operational and developing assets including the largest airport in India in New Delhi, as well as at least seven Indian and international greenfield projects. The parent group also has assets focused on energy production, highway and railway construction and coal mining operations.

According to the International Air Transport Association, the growth in India’s domestic passenger traffic softened last year owing to the bankruptcy of Jet Airways, a major airline carrier, and weakening economic activity. Growth in revenue passenger kilometres was just 5% in 2019 after four years of double-digit growth. Nevertheless, India is expected to become the third largest aviation market by 2024 behind the US and China.

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• Topics
• South Asia
• Infrastructure
• India
• Exit
• GIC Private
• SSG Capital Partners
• Special Situations