Turkey’s biggest airport operator will take a nearly half of the country’s Antalya hub, buying out the local partner of a franchise jointly run with Germany’s Fraport AG.
TAV Havalimanlari Holding AS, majority owned by Aeroports de Paris, is paying closely-held IC Ictas Insaat AS 360 million euros ($440 million) in cash for its 49 percent holding in the concession to run Antalya, the company said on Tuesday, confirming an earlier report about the plan by Bloomberg News.
TAV operates more than a dozen airports across Turkey, including Istanbul Ataturk, the country’s largest. The company is planning to add more domestic and international airports to its portfolio as the concession for Ataturk—its biggest revenue earner—ends in 2020. Controlling four out of five airports along the Turkish riviera will give it more marketing power, the company said, adding that it expects the Antalya deal to help earnings as soon as this year.
Shares Rise
Shares of TAV were up 2 percent percent in Istanbul on Wednesday morning after trading as much as 3.4 percent higher.
While the news of the acquisition is “a slightly positive catalyst” for shares, the “fragility of Antalya Airport’s passenger mix due to tourism related shocks” and “TAV’s higher indebtedness may limit the deal’s positive catalyst impact on the stock to some extent,” Melis Pocar, an analyst at Istanbul-based Oyak Securities, said in an emailed note.
Antalya airport’s current concession expires in 2024 “making it a short one, which in our opinion played a role in the relatively reasonable deal multiple,” Pocar said.
Antalya airport, the country’s third-busiest, served about 26 million travelers in 2017 and generated nine-month EBITDA of 187.8 million euros on revenue of 215.7 million euros, TAV said in an emailed presentation. The joint venture pays 100.5 million euros to the Turkish government in annual concession fees, totaling 2.02 billion euros in its operational life.
Istanbul-based investment bank Unlu & Co. advised IC Ictas on the deal.