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According to Bloomberg, the Hungarian state would acquire a 51 percent stake in the company that operates Budapest’s Liszt Ferenc International Airport. After years of trying, the Hungarian government may now actually buy back a majority stake in Budapest Airport.
Hungary has made a formal offer to buy a majority stake in Budapest Airport. According to the international news agency, the buyer is a state-controlled investment company.
However, Bloomberg does not refer to official sources but to a person familiar with the matter, writes Világgazdaság. The source, who asked not to be named, says the
government has made a formal offer for a 51 percent majority stake in Budapest Airport Zrt.
The negotiation process is not at the stage where the owners of Ferihegy Airport could accept the amount offered, but the decision has been made to initiate further negotiations on the takeover bid.
Bloomberg also understands that the remaining 49 percent will be acquired by another airport operator. However, it has not yet been revealed exactly which company is involved. The paper reported that the Ministry of Economic Development has been approached for comment on the development. On the Hungarian side, the ministry is leading the negotiations for the buyback, but declined to comment.
Photo via Facebook/Budapest Airport
In May 2021, the government appointed a government commissioner, László Palkovics, then Minister of Innovation and Technology, to prepare the acquisition of Budapest Airport into majority state ownership. Negotiations were led by the minister and a consortium of the state. In the summer of 2021, Indotek (leading investment management group) and Mol (multinational oil and gas company) made a non-binding offer of €4 billion. The international owners considered this to be a low figure, but certainly a suitable basis for negotiation.
The second non-binding offer, submitted in the autumn of 2021, was for €4.44 billion.
It seemed that the reacquisition of Ferihegy airport could happen at any moment, but in December 2021, Viktor Orbán announced that it was not reasonable to close the deal to reacquire Ferihegy before the 2022 parliamentary elections. The prime minister said that they would wait for the elections and then decide. He explained it by the state of the domestic budget, high inflation, and uncertainty in international financial markets.
In February this year, the return of the strategically crucial company to Hungarian ownership returned to the spotlight after Gergely Gulyás said a government briefing that the cabinet had authorized Márton Nagy, Minister for Economic Development, to negotiate the deal with the airport’s owners. The prime minister justified the decision by saying that the airport would bring huge benefits and that it was a matter of national security that it should be at least partly state-owned or partly Hungarian-owned.
We would like to see these well-known objectives, which were also stated when the airport was sold by the Socialists, implemented this year or the next,
he said. The comment was made in reference to the fact that 75 percent of the company was privatized in 2005, by the Gyurcsány government in a 75-year concession. The buyer was BAA Internacional Lcd, who was operating London’s Heathrow airport at that time, and the sale price was HUF 464.5 billion (EUR 1.196 billion).
In any case, at the end of May 2023, members of the government were already talking about closing the transaction by the end of the year. If Bloomberg is correct, the takeover bid now being submitted points in the direction of a buyback that could indeed take place by December this year. The remaining question is how much it will cost.
Via Világgazdaság, Featured photo via Facebook/Budapest Airport