New owner vows to complete construction of Heathrow Terminal 5 near London. (Photo courtesy of BAA plc)

Spain’s acquisitive infrastructure company Ferrovial Group, Madrid, is taking a big step skywards by buying the U.K.’s BAA plc., the world’s largest publicly owned airport operator, subject to various approvals. Ferrovial has vowed to continue with BAA’s 10-year, $18-billion construction program, including completion of London’s Heathrow airport’s terminal five in 2008.

After resisting Ferrovial’s offers since April, BAA on June 5 agreed an increased bid valuing the company at around $19 billion. “The offer represents a premium of more than 49% to the 30 day average pre-bid share price and, accordingly, the BAA board is recommending that shareholders accept the offer,” explains BAA Chairman Marcus Agius.

BAA chose the Spanish-led bid over a rival offer by a consortium headed by the U.S. investment bank Goldman Sachs. A week earlier, Ferrovial had raised its offer to around $18 billion its initial $16.5 billion bid this April. Ferrovial’s infrastructure unit leads the bidding consortium Airport Development and Investment Ltd., which includes Canada’s Caisse De Dépôt Et Placement Du Québec and Singapore government's GIC Special Investments Pte. Ltd.

ADI says it has secured financing to continue BAA’s U.K. construction plans. “We are committed to cooperating with current management and providing on-going investment in infrastructure,” claims Ferrovial Chairman Rafael del Pino. The U.K. Civil Aviation Authority earlier cautioned bidders against undermining BAA’s planned investments with excessive debts to fund the acquisition.

Till now, Ferrovial has been a minnow in the airport sector. It operates two small U.K. airports plus facilities in, Australia and Chile, altogether handling 36 million passengers per year. Acquiring BAA will bring the scale of its airport business in line with its toll road operations, which are increasingly in the U.S.

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This April, a team including Ferrovial’s highways subsidiary Cintra signed a 75-year contract with Indiana Finance Authority to operate and maintain the 157-mile Indiana Toll Road, for which it paid $3.85 billion. Cintra already had interests in a 99-year contract to operate the 7.8-mile, linking Chicago Skyway.

In March last year, a Cintra-led consortium signed a 50-year deal with the Texas Dept. of Transportation to finance, develop and operate the Texas Corridor's first section, with an estimated investment of $6 billion. Globally, Cintra manages 21 toll roads in Europe, North America and Chile.

Employing some 78,000 people, Ferrovial has invested heavily in infrastructure during the last decade, moving away from traditional contracting. Nearly two thirds of the group’s profits now stem from infrastructure and services, whereas construction and real estate accounted for 90% in 1998. The group reported net profit last year of $540 million on $13 billion sales.