Universities Superannuation Scheme (USS), the UK’s second-largest pension fund, has paid £143 million (€170 million; $230 million) for a 49.9 percent stake in The Airline Group.
The deal will see the institution become a major shareholder in NATS, the UK’s largest provider of air traffic control services, with a stake of about 20.5 percent in the business. The Airline Group owns 41.9 percent of NATS Holdings, the holding company for NATS.
The transaction comes hot on the heels of USS’ acquisition of an 8.65 percent stake in Heathrow Airport, Europe’s busiest airport and the third-busiest in the world. The investment, worth £392 million, was the pension’s largest-ever in the country.
Founded in 1962, NATS counts among the world’s largest air traffic management businesses, handling 5,700 flights a day. It provides services to 15 UK airports including Heathrow, Gatwick, Stansted and Birmingham, as well as in more than 30 countries in Europe, the Middle East, Asia and America.
USS will buy its stake from four members of the seven-strong consortium of airlines and tour operators behind the Airline Group, the outcome of an auction process carried out earlier this year.
USS’ closest rival in the auction had been Deutsche Flugsicherung (DFS), Germany’s state-owned air traffic controller. It was reported at the time that DFS had placed a higher offer for the stake, but that USS ultimately prevailed on the back of opposition by some airlines and political reservations against a foreign bid.
Thomas Cook, Tui, Lufthansa and Virgin Atlantic will divest around 5 percent each in the business, while British Airways, easyJet and Monarch have decided to hold on to their stakes.
The asset will be managed by the infrastructure team of USS Investment Management (USSIM), a wholly owned subsidiary of USS and its principal investment manager and advisor. Completion of the transaction remains subject to EU regulatory clearance.