News from December 28, 2012: As French construction firm Vinci Group is likely to acquire Portuguese airport operator ANA for 3 billion euros (3.97 billion U.S. dollars), the Portuguese government's privatization program is expected to exceed its previously set revenue targets.
Sources indicate that the bid from France's Vinci Group far exceeds the offers from Germany's Fraport, Swiss airport operator Flughafen, and the Argentine infrastructure construction group Corporación América.
The Portuguese government is eager to generate as much revenue as possible from the sale of state-owned assets to secure 5.5 billion euros by 2013, thereby meeting the terms of the 78 billion euro bailout program agreed upon with the "Troika"—the European Union, the European Central Bank, and the International Monetary Fund. The program also requires Portugal to implement cross-sector tax increases and spending cuts.
An anonymous source stated, "Vinci Group's bid is currently the highest, and the agreement has been submitted to the Cabinet for evaluation. The preliminary assessment recommends accepting the acquisition by Vinci Group, as its bid and overall terms are superior, though the final decision rests with the Cabinet."
Portuguese government officials, in response to the reports, stated that the Cabinet meeting is still ongoing and they will not comment on the transaction at this time.
The Portuguese government hopes to help reduce its debt burden by selling infrastructure. Although the regional debt crisis is still spreading, investor interest in state-regulated assets remains quite high. The Portuguese government has already successfully sold its stakes in power companies EDP and REN, with the buyers primarily being investors from China.
It is no secret that France's Vinci Group is attempting to expand its airport operations business. As part of an effort to recover from losses earlier in 2012, Vinci Group has been bidding for the Turkish airport operator TAV.
Despite the impact of the economic crisis, Portugal's ANA still recorded 425 million euros in revenue and 76.5 million euros in net profit in 2011. Three-fifths of the company's revenue comes from domestic and intra-European flights; the Portuguese government also hopes that long-haul flights to South America and Africa will bring new revenue growth.