German airports operator Fraport AG Frankfurt Airport Services Worldwide (Fraport AG) plans to sell its 30% stake in Flughafen Hannover-Langenhagen (FHLG) to iCON Flughafen (iCON), part of the iCON Infrastructure Group.

The agreement, signed Aug. 6, values the 30% stake at €109.2 million ($126.6 million).  FHLG is the operating company of Hanover Airport in northern Germany.

The other 70% of FHLG is held equally by the city of Hanover and Hannoversche Beteiligungsgesellschaft, a wholly owned company belonging to the State of Lower Saxony.

Barring complications, Fraport expects the transaction to be concluded during the next two months.

“For some time, we have received strong interest from the market for Fraport to sell its stake in Hanover Airport,” Fraport executive board chairman Stefan Schulte said. “This underscores Fraport’s competence in increasing the value of our airport investments, wherever we operate around the world. We achieve this by enhancing operations, infrastructure and the customer experience.” 

Hanover airport reported an 8.5% rise in passenger numbers in 2017 over 2016, handling 5.9 million travelers. For the first six months of 2018, the airport has seen a further 7.8% increase in passenger traffic over 2017 levels, to almost 2.8 million.

“Hanover Airport is a solid business with a bright future,” Schulte said.  “It has developed into an important aviation gateway in northern Germany for both passenger and cargo traffic.”

Based on current book values and current expectations, Fraport expects the Hanover transaction to contribute about €85 million to Group EBT. This will translate into approximately €25 million for the group EBITDA and EBIT for the current 2018 business year. After deduction of related income tax liabilities, the transaction will also have a noticeable positive impact of about 77 million on the group’s net profit.

As a result of the divestiture, Fraport’s executive board expects the group’s EBITDA, EBIT, EBT and group result for the full 2018 business year to exceed the margins forecast at the beginning of the year.

Alan Dron