Asian airports, shipping cos brace for M&A frenzy

Hong Kong: Asia’s airports and container shippers will be the focus of IPOs and M&A deals in the region’s industrial sector in the near term as governments look to reduce deficits and shippers consolidate, a top Citigroup banker said on Monday.
Global merger and acquisition volumes in the industrial sector have plummeted more than 40% so far in 2009 to roughly $138 billion, according to Thomson Reuters data.
Despite the gloomy numbers, Asia is strong compared with Western markets, and strategically sound deals would move ahead, Michael Borch, Citi's head of industrials, global investment banking, Asia Pacific, told Reuters.
“It is fairly well documented, what Korea is looking to do with Incheon Airport,” Borch said, in an interview.
“The most likely outcome will be an IPO, but of a minority stake in the airport. The reason being that with infrastructure funds, there are only a few that are happy to buy into assets without control. The only way you can monetise an asset without control is by way of an IPO.”
Other regional governments have already tapped the markets for their airports. Beijing Capital International Airport Co, for example, is listed in Hong Kong. “Infrastructure asset sales can contribute to deficit reduction,” Borch said.
Airports Authority of India plans an IPO next near, according to media reports. Hong Kong government previously had plans to privatise its Airport Authority through an IPO, but the plan has been shelved, with no clear signs of revival.
15/09/09 Reuters/Economic Times

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Categories: Airports Sep 2009, Foreign Sep 2009