Abu Dhabi's Mubadala Investment explores stake in London's Heathrow Airport

Abu Dhabi's Mubadala Investment is actively considering an investment in London's Heathrow Airport, Reuters reported citing sources familiar with the matter.

The sovereign wealth fund is contemplating this move after being approached by Ardian, a buyout firm based in Paris.

If Mubadala proceeds with the investment, it could join the ranks of Saudi Arabia's Public Investment Fund (PIF) and Qatar Investment Authority (QIA) as prominent stakeholders in the renowned London hub.

While discussions are currently underway, no formal agreements have been reached, and Mubadala has not finalised its decision on the potential acquisition.

The consideration comes after Spanish infrastructure company Ferrovial SE agreed to sell its 25 per cent stake in Heathrow to Saudi's PIF and Ardian for £2.37 billion (approximately $2.99 billion) in November.

However, an additional 35 per cent of Heathrow's capital, held by other shareholders, invoked tag-along rights, necessitating the sale of their positions for the deal to proceed.

The move aligns with a trend observed in recent years, where Middle Eastern wealth funds actively diversify their portfolios by investing in global infrastructure assets.

If Mubadala proceeds with the Heathrow investment, it would become the third Gulf state-backed shareholder in the airport, alongside PIF and QIA, which currently holds a 20 per cent stake.

Investments by Gulf state-backed entities in global infrastructure projects represent a broader strategy to reduce dependence on oil-dependent economies.

(With inputs from Bloomberg)