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Three European companies win $1bn Brazil airport auction

For 3.72bn reais, companies from France, Germany and Switzerland won contracts to operate and expand four of Brazil’s busiest airports.

Three European companies have won a concessionary auction worth over $1 billion to operate and expand four airports in Brazil.

Brazil’s National Civil Aviation Agency (ANAC) awarded France’s Vinci Airports, Germany’s Fraport AG Frankfurt Airport Services and the Swiss Zurich International Airport AG contracts to operate and improve four of the country’s largest airports.

The contracts were sold for a combined 3.72 billion reais ($1.2 billion; €1.1 billion), a 23 percent premium above what the Brazilian government expected from the auction.

The four airports together represent 12 percent of total airport passengers in Brazil, 12.6 percent of cargo transportation and 8.6 percent of Brazilian air traffic, according to ANAC.

Vinci paid 1.59 billion reais for the Salvador International Airport. Fraport AG won the Porto Alegre and Fortaleza International Airports for 382 million reais and 1.5 billion reais, respectively. And Zurich paid 241 million reais for the Florianopolis Airport.

Part of the concession calls for the bidders to improve airport facilities, including new terminals, landing and takeoff runways and increased parking. Investments planned at the four airports exceed 6.6 billion reais.

“The four winning proposals, combined, represents the largest fixed contribution to the airport system,” ANAC said in a statement.

The bidders are required to pay 25 percent of their concession upfront when contracts are signed in August, with the rest paid annually.