Veni, Vidi, Vinci

Vinci buys Gatwick Airport

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What's going on?

On Thursday, the world’s largest construction and infrastructure company, Vinci, announced it would buy a majority stake in the UK’s Gatwick Airport for $3.7 billion.

What does this mean?

After the deal, France’s Vinci will own 50.01% of the UK’s second- and Europe’s eighth-busiest airport, adding it to the 46 smaller airdromes around the world already in its hangar. Beyond bringing more sales and profits to Vinci, Gatwick (meaning “goat farm”) will likely also bring dividends. The airport has directly paid its owners over $1.6 billion since 2009, according to the Financial Times.

The deal was briefly put on ice last week, after reports of mysterious drones over Gatwick grounded 1,000 flights and disrupted thousands of peoples’ Christmas travel plans. That phantom drone menace is now neutralized (apparently)…

Why should I care?

For markets: UK confidence’s aborted takeoff.

A survey of UK business leaders showed their confidence in the British economy at its lowest level in 18 months on Thursday. Larger businesses were more pessimistic than smaller ones – perhaps because bigger companies tend to do more overseas business, and are therefore more exposed to whatever trade terms are agreed (or not) after the UK leaves the European Union. The country’s somber mood may have encouraged Gatwick’s previous owners to sell a chunk now and bag a profit. Gatwick’s continued success depends on travelers continuing to fly on its biggest airlines – easier for some than for others.

Zooming out: Confidence is slipping in China, too.

New data released on Thursday showed that Chinese industrial companies’ (e.g. machinery and factories) profits fell in November compared to a year before – for the first time in three years. Weak economic data was partly to blame, as companies braced for lower demand by cutting production. China’s central bank is taking steps to stem the decline and bolster confidence – and investors around the world will be watching closely to see whether it succeeds.

Originally posted as part of the Finimize daily email.

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