USD 615 Million Queen Alia Airport Transaction Sets Benchmark For MENA Infrastructure Deals

The sale of 85.75% of Airport International Group (“AIG”) marks the first transaction of its kind in the Middle East. AIG, which holds the Build-Operate-Transfer (BOT) concession for Queen Alia International Airport in Jordan, was recently sold to a consortium of investors with the controlling stake now held by Groupe Airport Du Paris (“Groupe ADP”) at 51%. The transaction is the first sale of a secondary infrastructure asset in the Middle East, and has set a benchmark for future deals. Akkadia Partners advised on the transaction from origination to execution, having been appointed by the exiting investment consortium.  

The model transaction demonstrates growing investor interest in Middle East infrastructure as an asset class, in a region where most infrastructure assets are owned and operated by the state. The exiting shareholders were a consortium of regional and international investors who had achieved an attractive Internal Rate of Return (“IRR”) within a timeframe of 10-12 years. The buyers consisted of a consortium led by Groupe ADP, an existing shareholder since 2007, with a 9.5% stake, and the current operator of the airport. At the close of the transaction, ADP’s controlling stake is 51%. Other investors included Meridiam, ASMA – IDB Infrastructure Fund II and EDGO Group. The selling shareholders were Invest AD (previously holding 38.5%), Noor Investments (24.5%), Joannou & Parakevaides (18%), and EDGO Group (9.5%), who sold 50% of their holding.

The advisor for the sale, Akkadia Partners, is a transaction advisory firm specialising in frontier markets, who were first appointed by the shareholders in 2016 to conduct a valuation of the transaction, and subsequently retained to manage the sale, liaising with existing and prospective investors on price negotiations, due diligence processes and deal execution.

Suha Najjar, Founder and Chief Executive Officer at Akkadia Partners, commented:

“The sellers in this transaction had achieved an attractive IRR and reached the end of the typical private equity cycle for this kind of infrastructure investment. The consortium’s buyers have clearly recognised the attractiveness of the asset, especially given the relative lack of supply of investible infrastructure opportunities in the MENA region. We are privileged to have played such a central role in the first transaction of this type in the Middle East and look forward to working on similar deals in the future.”

AIG was awarded a 25-year Build-Operate-Transfer concession in 2006 by the Jordanian government to rehabilitate, expand and operate Queen Alia International Airport, as part of a USD 850 million public-private partnership (PPP) agreement. At the time, the transaction was widely regarded as a model PPP deal, which included high-profile lenders and investors such as International Finance Corporation (“IFC”) and the Islamic Development Bank (“IDB”)

Najjar continued:

“The success of this sale reaffirms our position as a truly specialised transaction advisory firm in the Middle East. We’ve consistently delivered an exceptionally high level of service through the lifespan of the deals we’ve advised – from initial valuation, to execution and close. It is our firm belief that there is considerable opportunity for further such deals in the region, and the strong investor appetite we experienced on the AIG transaction clearly shows the demand that exists for high-quality infrastructure assets among the regional and international investment community.”

Akkadia Partners has a successful track record for providing strategic advisory services on some of the region’s largest and most complex transactions, including The National Bank’s acquisition of a majority stake in Palestine Islamic Bank, telecom operator Zain’s listing on the Iraq Stock Exchange and the launch of the Iraq Gate equity fund, dedicated to stock market opportunities in Iraq.