Jun. 7--Indianapolis International Airport, an economic engine for the entire region, was pulled into the orbit Tuesday of Rafael del Pino, an ambitious Spanish construction scion leading a new wave of global investing.
His firm, Madrid-based Grupo Ferrovial, teamed with Singapore's government to win control of publicly traded British Airport Authority from the London executives who had fought the acquisition for months.
The 7,000-acre Indianapolis airport, host to 10 major and 19 regional airlines, as well as a FedEx cargo hub, retail center, hotels and maintenance depots, is only a farflung piece of the $10 billion BAA global empire.
Indianapolis airport officials say they doubt operations will change as BAA, which manages the airport, merges into Ferrovial. But just how the local airport became caught up in a piece of international financial intrigue stands as an example of the shrinking globe.
Airport officials brought in BAA in 1995 as managers as part of a privatization effort intended to save $100 million. The effort marked a first-of-its-kind experiment in privatization, followed closely around the nation.
BAA overhauled airport retail, adding a food court and restaurants, news and gifts stores and about a dozen specialty retail shops.
It also administered other changes, including revamping the parking system.
Indianapolis Mayor Bart Peterson, who entered office with BAA already managing the airport, said he wanted to learn more about the sale of the British firm.
"I've been very comfortable with BAA," Peterson said. "The nationality of the company shouldn't make a difference. It's about their competence."
When BAA's stock price was slow to gain value, Ferrovial organized a $19 billion takeover, promising to find new ways to raise BAA revenue. BAA's board approved the offer Tuesday over a competing bid from New York investment bank Goldman Sachs, which was backed by Canadian pension funds.
Though the deal would raise Ferrovial's debt, del Pino told British reporters his firm could manage the takeover without breaking up BAA or raising fees at the airports it manages.
What del Pino saw in the British firm, which operates the largest airports in England, was a secure source of new cash that many investors now are zeroing in on.
In America's Midwest, foreign investors are buying and leasing highways, tunnels, bridges and airports, securing the endless stream of tolls and fees paid by public users. The dependable cash flow is useful in securing low-interest loans that can be applied to other acquisitions.
Indeed, Ferrovial is the driving force behind Cintra-Macquarie, the Spanish-Australian venture that last winter leased the Indiana Toll Road from the state. Ferrovial owns Cintra, which paid Indiana $3.58 billion for the right to manage the 157-mile-long toll road and hold on to driver's toll payments for 75 years.
If BAA's transition to Spanish control is rocky and airport fees do go up, air travelers could end up paying higher ticket prices. However, Indianapolis airport officials doubt the city will feel any tremors. Local officials expect the current executive team will remain in place. They note the airport board and not the firm managing the airport will guide the two major expansions under way, which involve a new passenger terminal and a larger FedEx hub.
"We don't anticipate any changes" in airport operations, said Indianapolis airport spokeswoman Patzetta Trice. "We are going to continue to do those things that are under the purview of the contract."
Trice pointed out the Spanish firm would inherit the BAA- airport contract that spells out the manager's duties. That contract expires in late 2008.
Ferrovial, founded in 1952 by del Pino's father as a railroad engineering firm, moved far beyond its roots in 1999. That's when the son, now 50, raised cash by selling shares in the company to investors on the stock market.
Local airport becomes caught up in international financial intrigue.
The announcement followed a late-night auction between the two consortiums for BAA, which operates seven airports around Britain.