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Last Updated: Monday, 19 December 2005, 11:26 GMT
BAA seals Budapest airport deal
Budapest airport
More passengers are passing through Budapest airport
BAA is to take over the running of Budapest airport after triumphing in Hungary's largest privatisation.

The Heathrow and Gatwick owner made a 1.2bn (1.8bn euros) offer to buy a 75% stake in Ferihegy airport, which the government is privatising.

BAA will assume responsibility for the airport - one of the fastest growing in Europe - on 23 December.

Unions representing airport staff have criticised the sale, staging a strike over fears of job losses.

Meanwhile German firm Hochtief, one of the unsuccessful bidders, has challenged BAA's bid in the courts.

It said it doubted BAA met the requirements for the bid, although it gave no details of where it thought BAA fell short.

BAA said it expected the challenge to fail.

Booming airport

As well as gaining a controlling interest in the business, BAA has secured a 75-year licence to run the airport.

It is the biggest privatisation in BAA's history
Mike Clasper, BAA chief executive

BAA outbid consortia headed by German companies Hochtief and Fraport.

"It is the biggest privatisation in Hungary's history and it is the biggest privatisation in BAA's history too," said chief executive Mike Clasper.

The airport is being sold to help finance its future development.

The number of passengers using the airport is rising sharply, boosted by the growth in budget airlines over the past 18 months.

Almost seven million passengers used the airport in the past 10 months, 27% higher than over the same period last year.

Budget airlines have flocked to the airport since Hungary joined the EU in May 2004.

There have been concerns that the deal - likely to be funded by BAA taking on additional debt - could constrain the company financially.

As well as the purchase price, the successful bidder will be obliged to invest 265m in upgrading the airport.


SEE ALSO:
BAA closing in on Hungarian deal
08 Dec 05 |  Business
BAA shake-up set to cost 700 jobs
01 Nov 05 |  Business
BAA passenger levels bounce back
11 Oct 05 |  Business
BAA weathers Heathrow meal strike
09 Sep 05 |  Business


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