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France’s Groupe ADP to buy 49% stake in GMR Airports for ₹10,780 cr

Groupe ADP, an international airport operator based in Paris, will hold a 49% stake in GMR Airports Limited (GAL), GAL's parent company GMR Infrastructure Limited (GIL) announced. The deal involves an equity consideration of ₹10,780 crore, that values GAL at base post-money valuation of ₹22,000 crore.

GMR Infrastructure Limited (GIL) has announced a strategic partnership with Groupe ADP for its Airports Business wherein the latest will acquire 49 per cent stake.

GIL has signed a Share Purchase Agreement under which Groupe ADP will hold 49% stake in GMR Airports Limited (GAL) for an equity consideration of ₹10,780 crore, valuing GAL at the Base Post Money Valuation of ₹22,000 crore. This equity consideration comprises of ₹9,780 crore towards the secondary sale of shares by GMR group and ₹1,000 crore equity infusion in GAL.

Groupe ADP has also pegged Earn-outs up to ₹4,475 crore linked to the achievement of specific agreed operating performance metrics as well as on receipt of certain regulatory clarifications over the next five years. Thereby, total valuation assuming all above Earn-outs are successfully consummated may reach ₹26,475 crore on Post Money Basis.

The first tranche of ₹5,248 Crore will be received by GMR Group immediately. This money will help deleverage the Group further and result in improved cash flows and profitability.

As part of the terms of the transaction, GMR will retain management control over the Airports Business with Groupe ADP having the customary rights and Board representation at GAL and its key subsidiaries.

The deal will unveil a first of its kind airport development and operations platform globally. Together, GMR and Groupe ADP will combine unmatched strengths in airport development and operations, offering the highest levels of passenger experience. This will also open up new opportunities for route development, enhanced expertise in operations, retail, IT, innovation, engineering and many more areas. As per 2019 passenger statistics, the combined passengers handled by GMR Airports and Groupe ADP stands at 336.5 million, the highest across the world.

GM Rao, Chairman, GMR Group said, “The partnership with Groupe ADP is in line with GMR’s business direction to become a global airport developer and operator. We have been on a journey of defining airports of the future with a key focus on passenger experience by leveraging enhanced technology and offering superior amenities. With Groupe ADP, GMR will have smoother access to global markets, opening up newer avenues of business growth.”

Augustin de Romanet Chairman and Chief Executive Officer of Aéroports de Paris SA-Groupe ADP stated: “The acquisition of a 49% stake in GMR Airports fits within Groupe ADP’s strategy. It sets a robust industrial partnership and enables Groupe ADP to build, only two years after taking control of TAV Airports, a unique worldwide network of airports with solid industrial expertise and strong development capacities. This acquisition will constitute a growth driver in the medium term, and also a transforming position for the group in one of Asia’s and the world’s most dynamic and promising countries.”

The partnership between GMR and Groupe ADP is being structured as a strong strategic partnership to be built on a two-way exchange of expertise, personnel, knowledge and market access. Passengers and other stakeholders will also benefit immensely and thereby setting newer industry-defining benchmarks.

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